“Competitiveness, Challenges and Prospects of SMEs in Bangladesh for Internationalization”
Course no: BA-412 Course name:Business Research Methodology

Submitted to:
Eijaz Ahmed Khan Assistant Professor Business Administration Discipline.

Submitted by: Pioneer II
Group Members Mahmudul Hasan Siddiqui ID # 040308 Tasmin Islam ID # 040316 Zahir Abdullah ID # 040320 Salma Begam ID # 040328 Mohammad Ali ID # 040342 4th Year, 2nd Term Business Administration Discipline Khulna University, Khulna.

Date of Submission: 13 July, 2008

1 .

hand tools and so on. Rapid liberalization has put most existing industries specially SMEs under severe strain because of their inability to compete with consumer goods being freely imported after the withdrawal of quantitative restrictions and the drastic reduction of import tariffs. 2. an attempt will be made to examine the current situation of the SMEs in Bangladesh. There seems to be an inconsistency between the increased heavy industries and the unsatisfactory growth of SMEs. This research uses some studies to identify some competitiveness. So the economic escalation and poverty alleviation of this country becomes the opposite side of a coin with SMEs development. some ways need to find out strategically for SMEs to be competitive for internationalization. and product quality and so on. when the giant industries became increasingly dominant. challenges and prospects of SMEs in Bangladesh for Internationalization as well as some constraints that have been hampering SME growth and to provide some pointers for the future.“Competitiveness. and the rate at which the glittering multistoried shopping malls are springing up in Dhaka and other major cities of the country is perhaps a good indicator of the rate of displacement of domestic products by imported merchandise. light engineering products. Challenges and Prospects of SMEs in Bangladesh for Internationalization” 1. chemicals and pharmaceuticals. footwear and leather goods. SME participation in global value chains has to be placed in the broader context of SME internationalization. The reorganization of production at the international level and the development of global value chains are having significant effects on SMEs. Introduction: The Least Developed Countries (LDCs) in the east have started refocusing their attention on SMEs to enhance their role in bringing about structural changes in their economies. Although some producers have been successful in improving their products and significantly increasing external market access. Still the pace of SME in the international competition is minimal. All these products (all under the SME category. food and beverages. With this potentiality if we consider the trade liberalization or internationalization then this sector becomes very lucrative for generating much more profit to the successful Entrepreneurs. The economy of Bangladesh is at the crossroads. For internationalization the adverse effects that present SMEs are facing cannot be stopped rather it needs to compete with the foreign products in domestic as well as international market. most are languishing. . There are no estimates yet about likely losses to the domestic trade and economy of the country from the flood of imported consumer and industrial products . textiles and apparels. For Bangladesh SMEs have assumed special significance for poverty reduction programs and potential contribution to the overall industrial and economic growth through SMEs internationalization process.cosmetics and toiletries. Literature Review: In this research. With this great opportunity for internationalization the situation will be very competitive and challenging for the owners of SMEs to survive in the market in the battle of price war. In Bangladesh this SME sector is contributing more than 25% of the total GDP. in particular 2 . small and medium size enterprises remained unchanged and even increased slightly in absolute terms. product offering. From the late 1980s and mid-1990s. machine tools. To be competitive.

In Bangladesh. urbanization etc. SMEs’ IJVs with local partner(s) may be associated with decreases in longevity. This is important when considering that reaching international markets is a problematic step for SMEs. The Conceptual Model This part of the study will chart out the conceptual and measurement issues of SMEs internationalization. This structural transformation contributes to making changes in product composition. Internationalization in turn is an entrepreneurial behavior in the pursuit of growth. technological. exports.. regulatory. on the other hand. infrastructural. there are constraints in the cases of legal. level of global integration. Declining costs of information and communication technology. high import of finished products etc. and human resources. administrative. SMEs are becoming more important for economic growth. SMEs internationalization through Competition and Challenges can be interpreted according to following model (See Figure:1). growth of SMEs has been largely retarded by a number of constraints. Considering the country’s level of economic growth. The international joint venture (IJV) is an important mode in the internationalization of small and medium-sized enterprises (SMEs). In parallel. Which describes the process of SMEs internationalization is considered to be an essential part in the competitive advantages especially in competition and challenge. . Large firms are downsizing. Partnering strategies in the formation of IJVs can have significant effects on the outcome of SMEs’ international expansion. Government’s pro-poor policies should focus sufficiently on these constraints and various budgetary measures should emphasize on the improvement of these constraints. the role of large and small firms is changing. However. In this context. In general. composition of resources. local development and innovation. Besides. outsourcing and off-shoring while raising productivity around a narrowing core business. put the SMEs in a challenging situation. lack of access to information. Small and medium sized enterprises (SMEs). a sustained level of development of small and medium enterprises (SMEs) is highly needed to reach the targets set by the United Nations (UN) in the Millennium Development Goals (MDGs) to alleviate poverty. account for a growing share of the work force in most countries. It is believed that the SME Cluster model increases the 3 . SMEs of Bangladesh are currently undergoing structural transformation because of various linkages at domestic and international expanding their business opportunities. there is ample scope for development of diversified and non-traditional SMEs in the country. low productivity. especially when SMEs acquire host country knowledge. market demand and market access. globalization and changing conditions for innovation and entrepreneurship are bringing new opportunities as well as challenges for countries and business alike around the world. the role of the government both in terms of policy and operations is strongly felt. 3. of which financial constraint is mentioned at first. In this rapidly evolving playing field. especially in the poverty reduction strategy paper (PRSP). This urgency is reflected in the government’s pro-poor policies. and market perpetration through the adjustment of changes in technology. degree of capitalization. However.

and product quality and so on. Thus. respondents see the questionnaire and interact face to face with the interviewer. It is easy to construct 4 . sometimes the respondents may be unable to articulate certain types of responses. control of respondents. diversity of information. 4. such as price war. 4. complex. 4.competitiveness of the SMEs of Bangladesh and thereby eliminates the potential problems in the process of SMEs internationalization. Research Methods The descriptive research study will provide some guidelines and recommendation that are important for the internationalization of Bangladeshi SMEs. Besides. lengthy. challenges and prospects factors. an attempt will be made to examine the performance of the SMEs whether they are getting success or not for poverty alleviation of Bangladesh. So respondents will be given aids. In personal interviews. In this research some methods will be chosen for addressing the competitiveness and challenges through SME internationalization. At the time of collecting information several criteria needs to be keep in mind to fulfill the research objective such as flexibility of data collection. description to help them articulate their responses. challenges and prospects of Bangladeshi SMEs. higher response rate and quantity of data. 4. and varied questions can be asked. From peer-to-peer support groups & business networks by SMEs SME create local business Viable business cluster cluster & production meet local market demand alliance SME could influence WTO negations and trade policies impact on local small business Advocacy networks Business forms partnership with corporations’ supply chain and international funding system that open channels to international markets SME’s network build for international support Figure1: SME Cluster Strategy Model There may be many methods to measure the extent to which the SMEs of Bangladesh are becoming internationalized. Personal interviews method may be perfect for collecting information. The socio economic characteristics of the respondents are not much diversified so that only one type questionnaire may be appropriate for the research study. It is assumed that for internationalization of the Bangladeshi SMEs those factors might have been important. .1 Information to be obtained To serve the research study lot of information will be needed relating with competitiveness. Seven point Likert scale-ranging forms ‘strongly disagree’ to ‘strongly agree’ will be used for measuring the respondent’s attitude toward SMEs internationalization through competitiveness. At first needed information will be specify once again. control of field force and data collection environment. measurement and scaling procedures Questionnaire design will be formulated as a series of steps. product offering.3 Questionnaire design. In addition.2 Sources of information and data collection Most of the information will be collected from field survey.

Finally a holistic approach is much needed to eliminate these bottlenecks for the battle of Internationalization 5 . 4. 5. infrastructural and other constraints. Here the research study will describe some recommendation for the development of our SMEs in the competition and some guidelines on how to become competitive and face the challenges.1. Respondents readily understand how to use the scale. which should be addressed more and more in the budget and more fund should be allocated for the improvement of these aspects. Sixty three samples will be picked up.and administer. The challenges that SMEs of Bangladesh are currently facing and the challenges that are coming in future. challenge is working well. Budget Status Principle investigator Researcher Research associate Books and Journals Survey (3 surveyors) Computer operator Photocopy and others Total Amount (Taka) 5000 3000 2000 800 3000 500 200 14500 6. and time. . sampling unit. Time and Cost Estimation 5. However. government budgetary support should be increased in these activities. Statistical adjustment of the data may be necessary to make them representative of the population of the interest. extent. Expected Output From the research study it would be found that the internationalization process of Bangladeshi SMEs through competition. 4. process will be guided by the Statistical Software SPSS.5 Data processing and statistical tools After collecting entire data.2. which will enhance productivity and efficiency of the SMEs. making it suitable for personal interview.4 Sampling process and sample size The target population will be defined in terms of respondents. there are administrative. In this research study whose business has fallen under the definition of SME will be considered as respondent. Time: Three Months 3 Weeks Literature review Duration of Survey Data analysis and further survey if necessary Preparation of draft report Submission of draft report Comments on draft report 5 Weeks 2 W e e ks 1 W e e k 1 W e e k 1 W e e k 5.

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