MGT601 SME Management Assignment No 02 Solution Spring 2013

The small and medium enterprises (SMEs) are considered as the engine of
prosperity for the vast majority of people, particularly in case of the disadvantaged segment in developing and developed countries alike. They accelerate economic activity, job creation and capital formation for the common good rather than increasing surplus for the few.

Taiwan, a small island country, hosts 97.8% SMEs. Taiwanese SMEs contribute
85% to the country’s GDP by engaging about 85% of non-agricultural labour force. The vibrant SMEs of Taiwan have expedited economic growth making Taiwan the sixth largest per capita ($16,400) earner in Asia and holder of the fifth largest foreign exchange reserves in the world.

What does it really take to make a business successful? This is not an easy
question to answer, as each entrepreneur has a different definition of success. The answer of success is too simple: “The key to a successful business is customer service and retention. That is so much more important than marketing. An entrepreneur is one man show, who has to make all decision regarding the enterprise (Finance, Procurement, Marketing, HR, Supply chain etc).

Consider that you are the head of a small enterprise (Ayan Art Furniture) in the
furniture sector, who are planning to serve the classical furniture requirements of homes and offices. The entrepreneur has facing a stiff competition from competitors in term of getting sales and also lacks its marketing ability to actively locate its business and find potential customers. The economy is dwindling, inflation is at its peak, power crisis is prevailing and purchasing power is decreasing overtime.

In the light of above what kind of actions Ayan Art Furniture has to take to establish its SME setup. Also what can be possible draw backs in selecting new venture opportunities?


  1. competition
  2.  lack of marketing
  3. inflation
  4. Economic crisis
  5. Purchasing power is decreasing
  6. Financial Issues
  7. Location


At least mention five possible SME’s sectors in Pakistan, which have tremendous
potential for growth.


The Possible SME sectors in Pakistan are:

  1. poultry farm,
  2. fish farming
  3. handicraft
  4. Animal farming,
  5. Agriculture

SME sector is the backbone of Pakistan’s economy in terms of its contribution towards GDP, employment generation and export development. Financial access is a key driver in developing the SME sector which in turn leads to economic growth of the country.
This was the crux of the speeches of the participants at the SME Financial Expo 2012 arranged by SME Business Support Fund (BSF), Ministry of Finance, Government of Pakistan, in collaboration with State Bank of Pakistan at local Hotel in Lahore.
The event was planned to the launch of BSF’s first SME Development Centre at Sundar Industrial Estate, which is an initiative taken by BSF to foster private sector development in Pakistan by providing high quality information support, competent policy advice and research, ensuring a wide dissemination of best practices of SME support in business community and providing effective professional services to the Industrial Estate.
While giving his welcome remarks, Syed Saquib Mohyuddin, CEO SME Business Support Fund said that SME sector is the backbone of Pakistan’s Economy in terms of their contribution towards GDP, Employment Generation and Export Development.
The SMEs in Pakistan face numerous problems including access to finance which affects the overall productivity of SMEs thus making them uncompetitive across the global value chain.

He further said that in order to create awareness amongst the SMEs about the financial solutions available for them and to encourage them to become part of the formal economy, banks have to design their financial products catering to the requirement and uniqueness of each sector in Pakistan.