Market development and product development are the most appropriate strategies the Korean wedding firms should employ. If the company/firm (like Wedding Ritz Company in Korea) has a well-established market within the country, then it should aspire to growing beyond boarders and venturing into new markets. Otherwise, the firm should invest into developing new and better products and quality services for its existing customers. Nevertheless, if the company has just ventured into the market (like the Kohit wedding Company in Korea), the company should in its initial stages consider the Market Penetration strategy so that it establishes a good rapport with its customers and with time it can grow the capability of attaining development.
2.4 PPM in SMEs
Program and Project Management (PPM) in SMEs development is of paramount importance (Cegarra-Navarro, Sánchez-Vidal and Cegarra-Leiva, 2015). Notably, one over three of the turnover of SMEs is contributed majorly by projects which consequently represent twenty percent of the aggregate economic activity. Specifically, 40% of the total turnovers for micro-enterprises are due from project. Hence project management is of paramount importance for the survival of these enterprises especially at the developmental stage (Rodney, 2010). However, according to Rodney, it makes no sense for SMEs to go around employing dedicated project managers in their operations. Instead, he suggests that such employees are suited for bigger enterprises and that SMEs only require more people who can easily provide simple but effective solutions of program management without necessarily being specialized or not necessarily being experts in PPM activities (Murphy and Ledwith, 2007).
2.4.1 Role of PPM in SMEs growth management
Aquil (2013) does a research on the best tools that that can be adopted by SMEs so as to attain a proper level of project management as well as program management. PPM includes all the initiatives taken to manage quality, risk, time, customer requirements, cost, integration, scope, human resource etc. which are all essential factors for the growth of SMEs
Table 4: A list of the role of PPM in businesses and a brief description of the roles (Aquil, 2013)
Role of PPM
Management of Quality
Certification initiatives such as the International Standards of Operation (ISO), Ingress Protection (IP) etc. (Mir and Pinnington, 2014) are of paramount importance in managing the quality of the products produced through effective PPM initiatives such that quality assurance and control is ensured.
Management of Time
Time is managed through scheduling. In this case scheduling involves resource and/or scope scheduling. The resources necessary for completion or implementation of certain projects are all enlisted and their availability and periods of availability are noted and a schedule is created based on the resulting information (Cegarra-Navarro, Sánchez-Vidal and Cegarra-Leiva, 2015). Consequently, specific dates and time periods are created for each project and thus strictness to following of this schedule ensures that the firms are effective in completion of projects.
Management of Communication
Communication is paramount in enterprises within the firm, with the suppliers, and with the prospective customers. Therefore the firms opt to manage their communications through adoption of new technology and software such as Skype for video conferencing.
Management of Risks
Risks are inevitable in business activities even for SMEs. These risks are present from the first stages of production to the latter stages of consumption (i.e. warranty for malfunctioned products to customers). Management of the risks therefore becomes important to ensure the growth of the SME firms (Cegarra-Navarro, Sánchez-Vidal and Cegarra-Leiva, 2015).
Management of Cost
Cost management is crucial for all the firms regardless of their project’s size and thus there is need of application of management strategies that will help keep track of the financial spending and capability of the SME and most importantly keeping track of the value earned by the firm due to investing into a given project.
Management of Scope
Though the SMEs depict adoption of informal scope management due to their relatively small coverage, scope management calls for criticality so as to ensure contingency on the stakeholder’s or the customer’s demands.
Management of firm’s integration
For a large enterprise, integration management between the firms’ resources and the environment is crucial; however, SMEs mostly do not require this aspect of management due to the limited size of their projects.
Management of Customer demands
What the customers (stakeholders) require of a certain project is crucial. The SMEs especially when competing with bigger firms require knowing the customer’s requirements so that they stand a chance of consideration by the customer during the tendering process (if any). They have to put aside a management crew which will study all the specifications made by the customers for a given project so that they come up with the most appropriate and cost effective project proposal for the customer (Cegarra-Navarro, Sánchez-Vidal and Cegarra-Leiva, 2015).
Management of Human resources
Informal management of the human resource is adopted since the SMEs are limited in scope and thus only incorporate a minimal number of employees who they can easily keep track of without straining financially or in terms of resource.
2.4.2 PPM tools for growth of SMEs
For the PPM to accomplish all the enlisted roles (table 4) there is need for incorporation of certain PPM tools which have been seen to be effective for the SMEs (Fassoula and Rogerson, 2003). These tools include:
i. Schedule monitoring PPM software – Software that can be able to formulate a proper time plan for the implementation and development of a project is an important tool for SMEs project and program management. In this case, for instance, the software provides a time bracket within which equipment required for the project can be acquired, assessed and proved to satisfy the objectives of the project efficiently and effectively (Aquil, 2013).
ii. Cost monitoring PPM software – financial spending beyond the planned budget costs requires to be kept in check, therefore software have been set out so as to ensure that cost over-runs due to quality management or even risk management are not experienced during the processes of accomplishing certain project or program in an SME (Aquil, 2013).
iii. Quality plan – As mentioned in part 2.4.1, quality management requires consideration of the customer’s requirement on delivery of certain projects by a given SME. The customer requires that the quality delivered for the project meets the standards set by the cost he/she has incurred in paying for the delivery. Further, ISOs and IPs are strictly used for products attained by firms from foreign firms so as to ensure the proper quality is attained (Fassoula and Rogerson, 2003). For locally produced products, the firm ensures quality by ensuring that it acquires the quality criterion used by the manufacturer and that this criterion has been fully met (Aquil, 2013). Another aspect to consider in ensuring good quality is met in developing of projects and acquiring equipment is the proper certification of the applied equipment (Mir and Pinnington, 2014).
iv. Resource planning tools – SMEs can employ resource planning tools such as the Enterprise Resource Planning software which aid the management of the business enterprise; and software tools for arrangement of orders within a firm referred to as the Distribution Resource Planning tools (Aquil, 2013). Overall the firms can employ the Human Resource Tools for enumerating the HR requirements for the firm in question.
v. Graphical representation tools – these tools employ measures that are able to provide risk information in a graphical format. Regardless of whether the risk is anticipated or not or whether it results at an early stage of production or a final stage of production, the information concerning the risk has to be kept track of and accounted for and the best PPM tool for this is the use of graphic software (Aquil, 2013). This graphic representations offer a good basis of risk analysis and management since past risks encountered are clearly documented for future reference. This is essential in developing contingency risk management plans which are essential for the growth of SMEs (Fassoula and Rogerson, 2003).
Notably, the above five PPM tools can be applied for both large enterprises and for the SMEs. They are specifically outlined in this case for the application of SMEs. Reason being, for any given enterprise, regardless of the size, there will always be costs incurred and this costs must be monitored and managed if the company is to grow in a healthy way. In all this spending, whether in production or project propagation, any organization must encounter risky ventures which make it vulnerable to losses and other risks. Further, the organization, no matter its size, must manage or the resources needed for production and success of the business. The organization must be fueled towards production of quality products otherwise they will not stand in the competitive market and not to forget, any activity that the firm engages in must be within the limits if a given schedule. In other words, these mentioned tools are the most applicable for SMEs based on the enlisted reasons. Moreover, the other tools such as the scope management tools and integration management tools are only suitable for large enterprises since they are aimed towards managing the coverage and projects of larger enterprises in which case the SMEs are of limited size (Aquil, 2013).
2.4.3 PPM structure for SMEs
As illustrated n section 2.4.2, the management of growth for SMEs is an important aspect which can be accomplished through the exploitation of the PPM tools illustrated there above. For this purpose, a structure is developed which employs the analysis of major growth factors and/ or determinants in a bid to explain how the determinants interrelate to affect the growth of an SME. In other words, the structure tries to develop a system in which the role of PPM in growth (2.4.1) is related to the tools of PPM applicable for SME growth. This structure can
Be illustrated in figure 5.
The structure is effective and efficient (Aquil, 2013) due to the following significances.
It considers quality, cost and time as the core determinants of the smoothness of a given project undertaken by the SMEs (Aquil, 2013). In this case, variation of one of these determinants directly alters the others and subsequently altering the whole projects operation.
The project would require a substantial quality plan with appropriate and best certification policies so as to satisfy the customer’s requirements and also so as to be worthy of the attached cost of the product or service delivery to both the firm and the customer (Aquil, 2013). Further, the time schedule should be appropriate for the quality delivery and cost effective project. In this case, the risks associated with this project are critically assessed and strategies necessary (contingency plans) for the management of such risks put forth.
The structure entails monitoring of risks through necessary cost and schedule monitoring software such that graphical representations of the therein risks (that have occurred and that are yet to occur) are developed in advance so that criterions on the best management processes are established effectively (Aquil, 2013).
Figure 5: The structure of an effective PPM management for SMEs (Aquil, 2013, p 14).
This chapter has offered a sneak peek into what other researchers have done concerning the growth of SMEs. As noted in most of the literature, the SMEs have been increasing in number since the beginning and they are the main sources of employment in the industry. Of importance is the wedding industry of Korea. This sector is of grave importance in the economy of Korea and a research of its improvement is a step forward to attaining more revenue for the economy of Korea. The chapter that follows will describe the methodology used to attain the objectives of this study.