The review in this chapter is structured such that it depicts the major themes addressed in this research: SMEs; Wedding Industry in Korea; Growth of SMEs and the factors and strategies associated with growth; and the PPM as applied in SMEs and the role PPM tools play in the management of growth for SMEs. Notably, the review has been divided into three main sections: 2.
2 SMEs, 2.3 Growth of SMEs, 2.4 PPM in SMEs, and 2.5 conclusion for the chapter. Within these sections, the major themes of the study have been discussed in details to incorporate various subsections which are relevant for this study.
According to Ghafoor and Iqbal (2007), SMEs have been recognized as key contributors to the economic growth of many countries. They are thus expanding at high rates in the local and global markets. Notably, the growth of SMEs is paramount if they are to survive the growing competitiveness in the market (E. Armstrong, 2013). In this case, Ghafoor and Iqbal, (2007) research on the strategies employed by the SMEs for growth and they come to the realization that the market development and not to forget the product management strategies are the main strategies that SMEs adopt for growth.
Importantly the SMEs mainly engage the internet as a major platform to propagate growth. Mustafa and Horan (2010) offers another strategy for the growth of SMEs, they widely expand on the adoption of acquisition as a growth strategy for these firms. The SMEs as mentioned in the previous have played a great role even in Korea. According to the Korean SMEs statistics (2014) (table 2), between 2008 and 2012, the percentage of SMEs accounted for 99.9% of the total number of firms in South Korea.
In addition, the number of SMEs increased sharply from 3,044,169 in 2008 to 3,351,404 in 2012 and the number of employees who work for the SMEs soared from 11,467,713 in 2008 to 13,059,372 in 2012. As it was mentioned above, the role of SMEs is vital to South Korea economy in terms of job creation. The ratio of employees working for SMEs was announced to be 87.7% out of the total number of employees, which is a comparatively high figure.
Clearly this illustrates how important the growth of SMEs is for a country like Korea. Table 2: Yearly Trend of SMEs in Korea Source: Statistics Korea, 2014
|No. of Firms||Total||3,046,958||3,069,400||3,125,457||3,234,687||3,354,320|
|No. of Employees||Total||13,070,424||13,398,497||14,135,234||14,534,230||14,891,162|
This information is summarized in table 3:Table 3: Classifications of SMEs (Ec.europa.eu, 2006)
|Category||Number||Turnover(Million Euro Pound)||Balance sheet total (Million Euro pound)|
|Medium-sized||Less than 250||≤ 50||≤ 43|
|Small||Less than 50||≤ 10||≤ 10|
|Micro||Less than 10||≤ 2||≤ 2|
This services include wedding consultancy, photography, decorations, design services, honeymoon services ( Heui-Uk Yoon, and Kyungdo Park, 2009). The goods in this industry include the tangible infrastructure such as wedding halls and or venues, flowers, caterers (meals and drinks), make up, fittings and wedding wears (Lau & Hui, 2010). Kim & Choi (2011) commends the improvement and thriving of the wedding industry in Korea saying that this has helped sustain many people who venture into the sector and also it enables lots of people to earn a living. Of importance is the brief analysis of the industry done by Kim and Kim (2013) in their research about globalization of Korean Wedding industry. In their research, the authors analyze the sector of this industry and conclude that the firms in the industry revolve around a given trend of commonalities. In this case the researchers note that the industry is affected by common problems which may be the cause of difficulties of the firms to venture into new markets.
For this purpose, the researches develop a SWOT analysis framework for the Korean wedding industries. SWOT here represents the Strengths, Weaknesses, Opportunities and Threats that the Korean wedding industry is susceptible to. The findings of the SWOT analysis can be enlisted as:v Strengths – There are plenty of infrastructures for wedding activities all over Korea. There exists sufficient professionalism in wedding related activities such as wedding consultancy and planning professionals.v Weaknesses – There exists very stiff competition between wedding firms and these results to poor service delivery.
The services are quite unaffordable especially by foreigners which results to difficulties in overseas servicing. v Opportunities - the Korean culture (Hallyu) have been highly envied by many and thus stand as an attraction for foreigners (especially in the near future).The major hotels are partnering with these firms thus sourcing a lot of funds for growth and developmentv Threats - The economy of Korea (and worldwide) is in crisis thus a slump occurs which threatens the Korean wedding Industry. Lots of women are opting to be ‘independent’ since due to the sensitization they have received and thus can sustain themselves.
Further, the industry can be assessed in terms of the PEST analysis in which, the Political, Economic, Social, and Technological aspects in Korea that affect the industry are explored. This will help develop a stronger assessment of the Korean wedding industry when used alongside the SWOT analysis. v Political - the government of Korea offers a convenient political system in which the growth of enterprises is highly favored by the encouragement of foreign investors and also entry of foreign market. The government is quite stable and has highly invested towards curbing corruption and ensuring transparency in the Foreign Direct Investments regulations so that the business sector can efficiently grow beyond boarders and enhances competitiveness (Seoul.
usembassy.gov, 2013). All these factors and more have established a stable working environment in which the wedding SMEs can thrive. From another perspective, the increased competitiveness is also a source of poor service provision as mentioned in the SWOT weaknesses (Kim and Kim, 2013).
v Economic – even though the GDP grew slower than expected in Korea, the country has other economic advantages such as a high demographic composition in which there is a continuous and reliable labor supply with low labor costs not to forget the tremendously growing technological innovation and supply (Seoul.usembassy.gov, 2013). Logically, these aspects create a favorable working environment even for the wedding sector where the good demographic composition is also yielding a good source of market for the industry’s products.v Social- the Korean community is quite conservative of its cultural and social norms.
For instance, as pointed out in the opportunities section (SWOT section) they have the Hallyu cultural wedding and norms which definitely provides an attraction means for foreigners to the Korean wedding market (Seoul.usembassy.gov, 2013). Albeit the fact that the women are venturing into academic lives and ending up as single ladies thus reducing the market for the wedding industry, the country has a favorable population age profile where most of the people fall within the marriage age bracket (25-45) they are majorly youth.v Technology- according to the research by Kim and Kim (2013) and the Seoul.
usembassy.gov (2013), the technological change rate in Korea is high based on the improved innovation and invention capability from the high population in the country and the increasing internet popularity (digitalization). Consequently, the wedding sector is benefiting by eased communication costs and improved ability of remote working. Clearly, the wedding sector of Korea is growing at a big rate but as there are many PEST issues as outlined above; weaknesses and threats facing it, there breeds the need to research more on strategies that can help improve the wedding sector and even fuel its growth so as to keep the employment levels maintained in good numbers and also provide more revenue for the development of Korea (Smba.go.kr, 2016).