SWOT Analysis of MSMEs: Evidence from Virudhunagar District

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1 SWOT Analysis of MSMEs: Evidence from Virudhunagar District G. Marimuthu Ph.D Research Scholar, Department of Business Administration, Annamalai University & Dr. G. Udayasuriyan Professor of Business Administration, Annamalai University Abstract In this paper examined that the SWOT Analysis of MSMEs: Evidence from Virudhunagar District. The sample size constituted 5 percent of the universe i.e., 424 manufacturing unit have been selected and approach to entrepreneurs. It is found that adequate incentives to their employees to motivate their performance, skilled manpower are prevailing, maintaining attractive packing, business is affected due to changing customer taste and preference, limited export opportunities, Necessary steps are taken for sales promotion, resources and support from family, efficient and motivated sales forces, High cost of inputs are incurred, purchasing raw materials frequently, exporting our products, cash disbursement, enough availability of fixed capital in our enterprise, recognize committed workers, good dealer network connections, The interest rate concession is helpful to our firm, It is too much of high interest rate of private financial institutions are the reason are high strength of their MSMEs. Keywords: Strengths, Weaknesses, Opportunities and Threats Introduction SWOT analysis is a strategic planning method used to evaluate the Strengths, Weaknesses, Opportunities and Threats involved in a project or in a business. It involves specifying the objective of the business or project and identifying the internal and external factors that are favourable and unfavourable to achieve that objective of their study. A SWOT analysis must first start with defining a desired end state or objective. A SWOT analysis may be incorporated into the strategic planning model, Saravanan and Vijayarani (2014). Strengths The strengths segment of a SWOT analysis provides an area to list everything done right either individually or as an organization. This section contains both strengths within the organization and external strengths, such as client relationships. Organizations should seek to reflect their strengths honestly to maintain the integrity of the SWOT analysis. Feedback from others can also provide clarification on strengths captured in this segment of the SWOT analysis, Lalitha Rani, (2000). Weaknesses The weaknesses segment contains needed improvements within an organization or personally. Group sessions can help organizations identify weak areas. Analysis in this segment can provide a clear list of areas that need a development plan to remedy the issues identified. Tools such as action plans and goal formation provide ways to improve weaknesses. From a competitive standpoint, organizations should attempt to mitigate weaknesses as soon as possible since they can offer an undesired opportunity to their competitors, (Bhatia 1999). Opportunities Opportunities external chances to make greater sales or profits in the environment. Opportunities for improvement exist within all organizations. This makes the opportunities segment of the SWOT analysis important. Within this segment, organizations identify internal and external opportunities. To have a comprehensive list, organizations sometimes use group facilitation to identify these opportunities. Organizations can add both current and future opportunities to this segment of the quadrant. Threats > RJEBS: Volume: 05, Number: 05, March-2016 Page 35

2 A threats element is environment that could cause trouble for the business activities. Threats, such as new competitors in the market, organizations can implement counter measures prior to the threat occurring. To ensure success, organizations may need to deal with both future and present threats. For individuals creating a SWOT analysis for personal development purposes, an example of a threat such as job security problems, would reside in this section of the SWOT analysis, Tanya Gupta (2013),. Definition of MSMEs Micro, Small and Medium Enterprises (MSMEs) play a vital role in the economic and social development of India. The MSME sector contributes in the manufacturing output, employment and exports. It plays a key role in the development of the economy with their effective, efficient, flexible and innovative entrepreneurial spirit. MSME sector has emerged as a dynamic and vibrant sector of the economy. It is expected that Indian economy will grow by over 8% per annum until Manufacturing Enterprises: The enterprises engaged in the manufacture or production of goods pertaining to any industry are specified in the first schedule of the Industries Development and Regulation Act, 1951.The manufacturing Enterprise is defined in terms of investment in plant and machinery. A micro enterprise, where the investment in plant and machinery does not exceed twenty five lakh rupees. A small enterprise, where the investment in plant and machinery is more than twenty five lakh rupees but does not exceed five core rupees. A medium enterprise, where the investment in plant and machinery is more than five crore rupees but does not exceed ten crore rupees. Statement of the problems The important problems are financial, marketing, social and psychological problems. The strengths of micro enterprises are viewed as higher than its weaknesses. Similarly, the opportunities are viewed as higher than its threats. But the level of perception on problems and prospects of micro enterprises depends upon the profile of the entrepreneurs and the profile of their enterprises. If the Government properly identifies the specific problems faced by a particular segment, they can implement appropriate programmes to reduce the problems. The Government is advised to provide financial and non-financial support to the micro entrepreneurs to enrich their productivity and profitability in near future. NEED FOR THE STUDY An entrepreneur is a person with some modern idea. They may implement their idea at different levels because of lack of guidance and expertise in the relevant field. They know the lack technical, finance, marketing knowledge, guideline, managerial techniques, etc. In the case of micro small and medium enterprises, the lack of awareness, exposure and opportunities generates many problems to the entrepreneurs. The scenario of the micro small and medium enterprises will be appropriately evaluated to identify the scope of micro small and medium enterprises in the globalized economy. The problems and prospects of micro small and medium enterprises should be equally examined to identify their future scope. Therefore, there is a need for change in the socio-economic, physical and psychological aspects of micro entrepreneurs. Objective of this study To identify the entrepreneur perception about strength factors of MSMEs performance. To make out the entrepreneur observation about weakness factors of MSMEs performance. To know the entrepreneur insight about opportunities factors of MSMEs performance. To examine the entrepreneur opinion about threats factors of MSMEs performance. Research methodology In this study Descriptive research design was used. The convenient sampling technique is considered to select entrepreneurs of MSME in Virudhunagar district. The Proportionate Stratified > RJEBS: Volume: 05, Number: 05, March-2016 Page 36

3 Sampling Method was used to select the respondents in MSME, Virudhunager District. This sampling involved in drawing sample from each stratum in proportion to the latter's share in the total entrepreneurs. 5 percent of each category of entrepreneurs namely Micro, Small and Medium were selected for the study. The sample size constituted 5 percent of the universe i.e., 424 manufacturing unit have been selected and approach to entrepreneurs. The universe constituting 11,398 entrepreneurs were survey in virudhunager district. This study is used Primary data collected. The statistical tools used for analysis mean and standard deviation. Analysis and Interpretation Table-1 Descriptive statistics for strength factors Strength factors Mean SD considerable availability of industrial estate in our area adequate incentives to our employees to motivate their performance skilled manpower are prevailing maintaining attractive packing business is affected due to changing customer taste and preference limited export opportunities Necessary steps are taken for sales promotion resources and support from family efficient and motivated sales forces High cost of inputs are incurred purchasing raw materials frequently exporting our products cash disbursement enough availability of fixed capital in our enterprise recognize committed workers good dealer network connections The interest rate concession is helpful to our firm It is too much of high interest rate of private financial institutions Source: Primary Data Table-1 lists the factors that strengthen the company. Factors are measured with more than 20 statements in the seven point scale. Further, mean and standard deviation values are calculated. The mean values ranged from 3.65 to Standard deviation values lies between 0.69 and From the mean values it is noted that considerable availability of industrial estate in our area (3.33), adequate incentives to our employees to motivate their performance (3.52), skilled manpower are prevailing (3.43), maintaining attractive packing (3.48), business is affected due to changing customer taste and preference (3.47), limited export opportunities (3.48), Necessary steps are taken for sales promotion (3.34), resources and support from family (3.45), efficient and motivated sales forces (3.52), High cost of inputs are incurred (3.43), purchasing raw materials frequently (3.47), exporting our products (3.37), cash disbursement (3.49), enough availability of fixed capital in our enterprise (3.60), recognize committed workers (3.64), good dealer network connections (3.65) The interest rate concession is helpful to our firm (3.52), It is too much of high interest rate of private financial institutions (3.63). Table-2 Descriptive statistics for Weakness factors Weakness factors Mean SD Being port near to industry is more advantageous to us > RJEBS: Volume: 05, Number: 05, March-2016 Page 37

4 We have adequate market intelligence Human resources are available in our area Information technology support increases our output Government agencies extend technical information to us Enough infrastructure facilities are available in our enterprise We are maintaining good relationships with suppliers The government provides adequate capital subsidy We utilize economical distribution channels We are maintaining good product display in the market Organizational system of our firm is good The sales tax concession is very useful to our organization Advertisement increases sales Our firm reaches high production capacity Our employees have sufficient facilities in the industry Source: Primary Data Table-2 lists the factors that weaken the company. Weakness factors are measured with more than 20 statements in the seven point scale. Further, mean and standard deviation values are calculated. The mean values ranged from 3.21 to Standard deviation values lies from 1.65 to From the mean values Being port near to industry is more advantageous to us (2.77), We have adequate market intelligence (2.71), Human resources are available in our area (2.63), Information technology support increases our output (2.72), Government agencies extend technical information to us (2.79), Enough infrastructure facilities are available in our enterprise (2.70), We are maintaining good relationships with suppliers (2.87), The government provides adequate capital subsidy (2.65), We utilize economical distribution channels (2.92), We are maintaining good product display in the market (3.08), Organizational system of our firm is good (3.06), The sales tax concession is very useful to our organization (3.07), Advertisement increases sales (3.11),Our firm reaches high production capacity (3.21), Our employees have sufficient facilities in the industry (3.16). Table-3 Descriptive statistics for opportunities factors Opportunity factors Mean SD There are sufficient waste lands in our area We periodically review the organizational performance The government extend adequate subsidies & incentives The power tariff concession is beneficial to our enterprise The emerging file sharing restriction is useful to maintain industrial secrets There exists reasonable interest rate and repayment schedule from financial institutions Liberalizations are enhancing our organizational performance Market conditions are favorable to our products different location is useful to our industrial activities We are utilizing customer based strategies in our industry The income tax concession is motivated to our industrial growth Growing market is useful to our business Adequate availability of natural resources in our industrial area > RJEBS: Volume: 05, Number: 05, March-2016 Page 38

5 The reduction of trade barriers is useful to our business development Source: primary data Table-3 lists the factors for getting opportunities. Factors are measured with more than 20 statements in the seven point scale. Further, mean and standard deviation values are calculated. The mean values ranged from 3.74 to The mean values there are sufficient waste lands in our area (3.59), We periodically review the organizational performance (3.50), The government extend adequate subsidies & incentives (3.53), The power tariff concession is beneficial to our enterprise (3.43), The emerging file sharing restriction is useful to maintain industrial secrets (3.59), There exists reasonable interest rate and repayment schedule from financial institutions (3.52), Liberalizations are enhancing our organizational performance (3.55), Market conditions are favorable to our products (3.44), different location is useful to our industrial activities (3.59), We are utilizing customer based strategies in our industry (3.70), The income tax concession is motivated to our industrial growth (3.71), Growing market is useful to our business (3.73), Adequate availability of natural resources in our industrial area (3.49) and The reduction of trade barriers is useful to our business development (3.46). Table-4 Descriptive statistics for threat factors Threat factors Mean SD Our workers are covered under ESI / other measures Being port near to industry is more advantageous to us Information technology support increases our output National high way and Rail transports are very useful to us Human resources are available in our area The sales tax concession is very useful to our organization Enough infrastructure facilities are available in our enterprise Marketing strategies are utilized in our industry Advertisement increases sales Our trade mark is known to the customers We have adequate market intelligence The government provides adequate capital subsidy Source: Primary data Table-4 lists the factors that threatening the company. Factors are measured with more than 20 statements in the seven point scale. Further, mean and standard deviation values are calculated. The mean values ranged from 3.16 to Standard deviation values lies between 1.66 and From the mean values it is clear that the workers are covered under ESI / other measures (2.74), Being port near to industry is more advantageous (2.73), Information technology support increases our output (2.56), National high way and Rail transports are very useful (2.81), Human resources are available in our area (2.99), The sales tax concession is very useful to our organization (2.96), Enough infrastructure facilities are available in our enterprise (2.58), Marketing strategies are utilized in our industry (3.04), Advertisement increases sales (3.16), Our trade mark is known to the customers (2.87), adequate market intelligence (3.08) The government provides adequate capital subsidy (2.61). Conclusion In this paper examined that the SWOT Analysis of MSMEs: Evidence from Virudhunagar District. it is found that adequate incentives to our employees to motivate their performance, skilled manpower are prevailing, maintaining attractive packing, business is affected due to changing customer taste and preference, limited export opportunities, Necessary steps are taken for sales promotion, resources and support from family, efficient and motivated sales forces, High cost of inputs are incurred, purchasing raw materials frequently, exporting our products, cash disbursement, enough > RJEBS: Volume: 05, Number: 05, March-2016 Page 39

6 availability of fixed capital in our enterprise, recognize committed workers, good dealer network connections, The interest rate concession is helpful to our firm, It is too much of high interest rate of private financial institutions are the reason are high strength of their MSMEs. Reference Bhatia, Saini and Dhameja (1999) Problems and Constraints, Training Needs and Managerial Capabilities of Women Entrepreneurs Entrepreneurship in 21st Century Jaipur: Rawat Publications,. Desai and Vasant (1983), Problems and Prospects of Small scale Industries in India, Himalaya Publishing House, Bombay. Gupta, and Khanka (1996) Entrepreneurship and Small Business Management, Sultan Chand & Sons. Lalitha Rani, (2000) Enterprise Development: Employment Avenues for Women, Monthly Public Opinion Survey, 45 (12), Redman, L.V. and Mory A.V.H. (1923): The Romance of Research, p.10. Sandesara J.C. (1993), Modern Small Industry Aspects of Growth and Structural Change, Economic and Political Weekly, Vol.28, No. 6. Saravanan and Vijayarani (2014), SWOT analysis of micro small and medium enterprises in thanjavur district. Asia Pacific Journal of Research Vol: I Issue XIII, Tanya Gupta (2013), SWOT Analysis Of Small Scale Industries In India. International Journal of Management and Social Sciences Research Volume 2, No > RJEBS: Volume: 05, Number: 05, March-2016 Page 40