Exploring the Development Strategies of Rural Small, Medium and Micro Enterprises

• Published in: Journal of Management and Business Administration Central Europe 2019, Vol.27 (4), p.95-123
• Main Authors: Mang’unyi, Eric Ernest, Govender, Krishna
• Format: Article
• Language: English
• Subjects: Business Economy / Management
• ISSN: 2450-7814; 2450-8829

Purpose: While the product-market typology model seems to be best understood and widelyembraced by large corporates, it is less noticeable among many small businesses. This article adoptsthe aforementioned framework to identify and empirically analyze impactful strategies on variousmeasures of growth associated with rural Small, Medium and Micro Enterprises (SMMEs) in SouthAfrica.Methodology: Using data from a survey of a probability sample of 148 owner-managed small businesses,Exploratory Factor Analysis test was conducted to test for internal scale consistency of thedata. In the analysis: six predictor variables formed the growth strategies, while growth measurescomprised three variables, then fitted into a prepared regression model.Results: The regression model reveals the use and implementation of market penetration and pricingstrategies which have a positive and significant impact on the SMME’s growth. Findings furthersuggest that – while the gender of the owner-manager has no influence on the growth of the SMMEs– immigrant SMMEs seem to perform better compared to ventures owned by other race categories.Overall growth of SMMEs is generally more driven by customer base, competitive advantage, andcustomer satisfaction.Implications: The implication for rural SMMEs amid the uncertainties and challenges in thedeveloping economies, is that certain strategies act as a catalyst for growth and performance. Thefindings may be used to develop policies that promote entrepreneurship in South Africa and otherdeveloping countries.Originality/value: The paper’s unique contribution is that virtually no study yet attempted to applythe product-market typology model holistically to investigate its influence on the growth of ruralSMMEs in a developing country.