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SME Exam With Questions And Accurate Answers
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SME Exam With Questions And AccurateAnswers
Micro enterprises - Answer < 10 employees
< 2 million in turnover
< 2 million in assets
Small enterprises - Answer < 50 employees
< 10 mln in revenues
< 10 mln in assets
Medium enterprises - Answer < 250 employees
< 50 mln in revenues
< 42 mln in total assets
Focused or niche strategies - Answer The conventional strategies for SMEs
1) They guide innovative processes - they make the economy grow
2) They create wealth and jobs
3) They establish a "cultural atmosphere" geared towards change, innovation
and the construction of the common good. - Answer Three reasons why
entrepreneurs represent an irreplaceable resource for economic development:
1) central role of the entrepreneur
2) family ownership
3) occasional development of resources and capabilities
4) predominance of informal planning and emerging strategies
5) firm's positioning in a limited competitive scope - Answer Elements that
characterise SMEs:
Fragmented industry - Answer Numerous competitors, none of which has a
significant market share: no firm can significantly influence the behaviour of
other players or overall industry performance.
, Gini Index - Answer An indicator of equality/inequality of income distribution
among firms in the industry. Two variables are used: industry concentration and
market share of the first n firms.
Concentrated industry - Answer Where the first four firms hold a combined
market share of 40% or more.
Economic factors limiting industry concentration - Answer - Absence of
economies of scale
- High incidence of transport costs
- Erratic fluctuations in sales
- No size advantage in contractual relations with customer/supplier
- Diseconomies of scale in certain key activities
- A high degree of product customization
- Economic and/or managerial barriers to exit
- Local legislation that imposes conformity to certain standards
- A government ban on concentration
Key advantages of small firms - Answer - Flat organisational structures
- Flexible organisational structures
- Personal contacts of the manager-entrepreneur
- Motivated organisation
- Personal relationships with clients
... and, with technology development, economies of scale are becoming more
easy to achieve
Basic focus industry - Answer In fragmented industries with fragmented
downstream customers, it is possible to compete successfully by "doing one's
job well" - deciding not to pursue growth in segments or industries dominated by
larger or longer standing customers
Supply chain partnerships - Answer In fragmented industries, where down
stream customers are in the process of concentration, it is necessary to pursue
this strategy - to serve customers and this requires an increase in firm size.
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