Business Structures and SME Strategies

Types of Business Concentration

Based on Production Phases

Horizontal Merger

Occurs when companies within the same sector or performing the same processing or manufacturing stage combine.

Vertical Concentration

Involves the grouping of companies engaged in different phases of the production process, increasing industry supply through complementary products.

Conglomerate Merger

Characterized by multi-sectoral diversification.

Cartel

A formal agreement between firms to reduce or eliminate market competition, often controlling production and distribution.

Trust

The union of different businesses under central management to control product sales and marketing.

Holding Company

Controls other companies' activities through ownership of their shares.

Characteristics of SMEs

1. Represent over two-thirds of industrial employment.
2. Capital is owned by an individual or a small group.
3. Highly adaptable to market changes.
4. Can achieve large production volumes, invest in capital goods, implement marketing strategies, and reduce labor costs.
5. Flexible and adaptable to volatile demand.
6. A significant asset for economic growth.

Internationalization of SMEs

Key Steps

Qualitative Transformation

Enhance product competitiveness after initial availability.

Market Selection

Choose the target market after defining the product.

Phase 1: External Focus

Achieve a sufficient degree of internationality, such as a 25% export rate.

Financing SMEs

Options

Cash Flow

Internal resources generated by the company; the easiest financing method.

Non-Banking Financial Products

Include leasing, factoring, and loans.

Banking Financial Products

Examples include trade discount loans.

Public Support

Seeking assistance from public institutions.