Why Do Small-scale Businesses Prosper In spite of Huge Competition from Big Enterprises?
“If we take the case of distinctive and tailor-made goods, these can only be manufactured by the small-scale firms. Large size units produce only standardized products. ”
Every nation tends to develop large-scale enterprises because the development of the country is directly linked to them. This is especially true in today’s time when every nation is in the race of being a superpower. Despite preference to large-scale concerns, small-scale enterprises still play an important role in the overall industrial development of a country.It is really surprising that why and how do small-scale companies exist and flourish when they always have to face tough competition from the big companies. Let’s have a look at some of the factors that are in favor of small companies.
First is the limitation to the growth of large firms. Though there are many economies for big size enterprise, still every entrepreneur is not successful in managing big units.
Moreover, everyone cannot organize huge amount of money that is required for setting up a very big business. Limitations on various factors encourage the development of big and small size units together. If demand for goods is not stable, it becomes difficult to start large-scale production.
Even when there is a fall in demand, the production has to be maintained at the same level by a big company. It is because if the production is reduced, the overhead expenses tend to increase the cost of production. This ultimately leads to loss.
One thing more. If we take the case of distinctive and tailor-made goods, these can only be manufactured by the small-scale firms. Large size units produce only standardized products. The existence of various tailoring shops and shoemakers despite the development of readymade garments and shoe-making industry is the outcome of the customer’s preference for their own likings.
A small-scale unit takes less time in starting its operations. Large size units take longer time in setting up various equipments. An entrepreneur naturally takes interest in investing in a concern where return is quick.
Also, a small-scale unit enjoys much flexibility and is able to alter its functions as per the changing needs and market forces. Any concern always likes to change its production to those goods, which are in more demand. This is easily possible in the case of small size companies.
Author - DeeKay
This article was created by DailyOjo staff. Report Spam/Abuse