Small & medium enterprises: ITs competitiveness and “Buyer- supplier relationship”

SMEs are considered as engine for economic growth all over the world. After the globalization of market, SMEs have got many opportunities to work in integration with large-scale organizations. They cannot exploit these opportunities and sustain their competitiveness if they focus only on certain aspects of their functioning and work in isolation. In fast-growth industries in emerging markets, developing enduring manufacturer– supplier relationships is a critical element of a manufacturer's ability to gain competitive advantage. Supplier is an important partner in any organization, and hence, maintaining relationship is important for an organization who is an industrial buyer. The purpose of this paper is to review the literature on the competitiveness of SMEs and buyer-supplier relationship practices in small and medium scale enterprises (SMEs) and outlines the key insights. This paper explores buyer and supplier relationships from the perspective of Small and Medium Enterprises (SMEs).Questionnaire data from 78 SMEs located in different industrial areas of North Gujarat Region were collected. Responses were taken through Likert scale, and results were analyzed by performing Principal Component Analysis. The factor analysis outcomes help managers better understand the supplier selection process from an economic perspective, and improve competitiveness by helping them to make appropriate decisions. This paper sets out an alternative rationale for exploring what SMEs ‘do’ in terms of building a buyer-supplier model.