Role of the Internet in SME growth strategies: case studies of Swedish companies

Small and Medium Enterprises (SMEs) have been recognized as important contributors in the economy of many countries and new opportunities are opening for them in domestic and international markets. It is vital for an SME to grow in order to remain competitive in these markets. According to researchers, there is no single theory which can sufficiently explain growth of an SME but the importance and use of the Internet is becoming increasingly visible among small and medium enterprises. However, in spite of the Internet’s potential, most of the firms do not view it as key to their strategies for growth. The aim of this thesis is to investigate how SMEs are using the Internet in strategies they adopt for growth. A qualitative study comprising two case studies on Swedish firms was conducted with aspiration to describe the role of the Internet in their strategies for growth. The findings indicate that small and medium enterprises adopt product development and market development strategies for growth. These firms use the Internet in specific growth strategies mainly to enhance internal and external communication, shortening the development cycle of new products, expansion of geographical markets regionally and globally, export at low costs, and providing support to customers. Firms use the Internet to overcome the disadvantage of being small in size to reach customers especially in international markets. However firms do not use much of the Internet for advertising and in establishing new distribution channels. Studied firms adopt middle levels of the Internet integration and recognize the importance of higher levels to gain maximum benefits from growth strategies. The findings support past research in that whereas firms perceive use of the Internet as important they do not use the Internet to its full advantage for growth. Overall, case studies show that SMEs have clear approach towards adoption of strategies for growth and consider the Internet as vital contributor for performance.

Author: Ghafoor, Zaghim; Iqbal, Mustafa

Source: Luleå University of Technology

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