Friday , September 17 2021

How Malaysian SMEs Can Win Big

Malaysian SMEs (Small Medium-sized Enterprises) is the largest business establishment and vital component of the country’s economic development but how to make them win BIG?

Some local research identified five key challenges faced by Malaysian SMEs :

  1. Lack of access to finance
  2. Human resource constraints
  3. Limited or inability to adopt the technology
  4. Lack of information on potential markets and customer
  5. Global competition

The question of how Malaysian SMEs win big when there is a high risk that SMEs will be wiped out if they do not increase their competitiveness in the new, rapidly changing world of globalization.

Alibaba Founder Jack Ma predicted that SMEs can benefit up to 60% of globalization.

As a person involved in researching and executing Internet marketing since 1998, I strongly believe Malaysian SMEs, particularly its founder and/or owners should master Internet Marketing or now the buzzword Digital Marketing.

Facebook and Google are two platforms that offer cost-effective and real-time data for marketers to funnel through their prospects.

FOr most Malaysian SMEs, the owners are only aware the final displayed output of Facebook and Google. SME owners are also in the opinion that conventional meet and greet approach is far more effective as they rush to fulfill cashflow demand.

Being an entrepreneur and having exported my products to more than 30 countries for last 2 decades, I do agree that the meet and greet relationship marketing model is still very much effective. But, why do Malaysian SMEs need to constraint their market within limited customers?

Rick Kash and David Calhoun in their book How Companies Win shows how organizations can use everything from social networks to more revealing and effective consumer-research techniques, and then introduces the demand chain, the logical new partner to your supply chain.

They identified two lessons from dot-com burst survivors have in common.


One of the lessons they taught is that we have now entered an era of oversupply. Oversupply is a situation where significantly more supply exists than there is the demand to absorb it. Oversupply is often characterized by a lack of differentiation, with price becoming the primary factor underlying purchase decisions. As a consequence, pricing power virtually disappears and organic growth and profitability become increasingly difficult to achieve.

Meet Demand

The second lesson to be learned is that in an era of oversupply it is imperative that you construct a framework in your company that encompasses and aligns everyone toward meeting, not just the current, but also the latent and emerging demand of your highest-profit customers and consumers.

And before you can do that, you need to understand who those customers and consumers are, where they are, and what “need states” they exhibit as they make their purchasing decisions.

The Demand-Driven Economy

How to win big? Have you ever thought of how Apple knew that consumers wanted to bring the best of mobile phones and PCs together into a device that might ultimately reinvent both industries?

The simple answer is that companies understood, in a very deep way, the facts, the economics, and the content of what their customers and consumers demanded. Companies like these, which win on a continual basis, operate above all by understanding demand at the higher market and sector levels.

The demand-driven company not only thinks about today and tomorrow but next year and the next five years. The supply-driven company only thinks about today, tomorrow, and the end of the quarter.

What these great companies do is the result of a business model that operates beyond the simple — and increasingly risky — strategy of “asking customers what they want”. These great companies see trends and recognize patterns forming in their markets, their category, among their different customer segments — and even outside their businesses, in adjacent markets, and across the entire culture — and develop hypotheses about what those customers will want.

Only then are they in a position to query customers — and even then, only the right customers — and begin to align current strategies, resource allocation, products, and other offers to intercept this demand as it approaches.

Be Different

Once your SME has this understanding, you are in a better position to satisfy the demands of the most attractive of these demand profit pools.

You can use your knowledge and understanding to align your differentiated brands and products so that you capture a larger percentage of the profitable demand than your competitors.

Customers within those demand profit pools are attracted to both the rational and emotional benefits of these submarkets. That’s why the range of products was introduced.

Since, people have different lives, tastes, lifestyles, needs, and personal histories, they also live in different environments and are at different points in their lives.

The result is a wide spectrum in both rational benefits (quality, performance, safety, comfort, eco-friendliness, mileage, power, price) and emotional rewards (status, “greenness,” hipness, safety).

Any given market, whether in consumer or business-to-business industries, will have several distinct demand profit pools. These should be defined not simply by who these customers are or what they purchase but, most importantly, by why they make the decisions they make.

And beyond understanding the who, what, and why of customers by a group, businesses that win must fully understand the economics of each demand profit pool. Determining which ones spend the most, which are most and least price sensitive, and which offer the highest and lowest profit potential are all critical to determining which demand profit pools to focus on and how to serve them.

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