THE STRUCTURE OF RESOURCES AND INTERNATIONALIZATION OF SMALL MEDIUM ENTERPRISES (SMES): A CASE STUDY OF SNACK SMES IN WEST JAVA

• Main Author: Rahmawati Putri, Henny
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/45928
• Institution: Institut Teknologi Bandung

Small and Medium Enterprises (SMEs) play an important role in the Indonesian economy by dominating 99 percent of companies in Indonesia. West Java, as one of the main provinces in Indonesia, is also dominated by SMEs by 74 percent. Internationalization of SMEs is known to have long-term positive effects for the country and SMEs themselves, which makes it important to encourage SMEs to go global. The snacks industry is one of the promising industries in the international market. However, the contribution of SMEs to international sales in Indonesia and West Java is still small and tends to fall. To increase the level of exports, an analysis on important aspects of internationalization which consist of the speed of internationalization and sustainability performance in international markets is needed. Meanwhile, to achieve that, the performance of SME businesses in the international market should be improved. Researches show that structured internal resources are the driver of SMEs performance in the global market. This final project aims to analyze the relationship between the structure of SME resources and the development of international business that they do as measured by the beginning of internationalization and the sustainability of their business performance in international markets. The method used is a case study of two chips SMEs in Bandung, West Java, which meet the criteria as SMEs that quickly enter the international market and successfully maintain the sustainability of their international business. The Critical Incident technique is used to find important events in terms of resource development in both companies and about their efforts to penetrate the international market. The results of the study found that the resources in the strategic group affect the sustainable export performance of the two SMEs. Conversely, time to enter foreign markets is less influenced by competitive and strategic resources. The speed of entering international markets is apparently more influenced by information about opportunities in these markets that they obtain from their business networks. Therefore, it is very important for SMEs to develop their business networks to obtain market opportunity information, especially in international markets. The implication of this study is resources mapping that can be implemented as a basis for making strategies by snacks SME owners in West Java.