Medium-sized enterprise

A medium-sized enterprise (MSE) is a business organization with a relatively small or medium-scale workforce and revenue. These businesses are typically smaller than large corporations, but larger than small businesses or startups. They have a more complex organizational structure, including specialized departments, and may be multinational with multiple locations. MSEs typically have a higher rate of growth than small businesses and often have global reach.

MSEs generally offer a wide range of products and services and can benefit from economies of scale. They are able to develop new products faster and more efficiently than small businesses. In addition, they often have more resources to draw upon, such as access to capital and talent.

MSEs typically face different challenges than small businesses, such as the need to balance innovation and risk, and the need to manage a larger workforce. They may also face higher costs of operations due to their size, such as higher costs of labor, materials, and overhead.

Overall, medium-sized enterprises offer a unique set of advantages and challenges. They have the potential to grow rapidly and offer products and services on a larger scale, but also face higher costs and risk. With the right strategies and resources, MSEs can be successful and have significant impact in their respective industries.

Example of Medium-sized enterprise

Medium-sized enterprises are usually characterized by having between 10-1500 employees and a turnover of between €2 million and €300 million. Some examples of MSEs include:

• Dell Technologies: Dell Technologies is a technology company that provides computer products, software, and services. It employs over 140,000 people and has a revenue of over $90 billion.
• Marriott International: Marriott is a hospitality company that operates hotels and resorts. It has over 1.3 million employees and reported revenues of over $20 billion in 2019.
• H&M: H&M is a fashion retailer with over 4,000 stores in 73 countries. It employs over 164,000 people and has a revenue of over €20 billion.

When to use Medium-sized enterprise

Medium-sized enterprises should be used when businesses have outgrown the capabilities of small businesses and startups, but are not yet large enough to be classified as a corporation. MSEs can benefit from economies of scale to develop new products faster and more efficiently than smaller businesses, and have access to more resources such as capital and talent.

Types of Medium-sized enterprise

• Manufacturing: Manufacturing MSEs are typically involved in the production of goods. They may produce items for commercial or industrial purposes, or for consumer use. Examples of manufacturing MSEs include automotive parts manufacturers, food and beverage producers, and clothing manufacturers.
• Retail: Retail MSEs are involved in the sale of goods and services to consumers. Examples of retail MSEs include clothing stores, bookstores, and restaurants.
• Technology: Technology MSEs are involved in the development and use of technology to create products and services. Examples of technology MSEs include software developers, cloud computing companies, and web development firms.
• Financial services: Financial services MSEs are involved in the provision of financial products and services. Examples of financial services MSEs include banks, insurance companies, and investment firms.

Medium-sized enterprises can play an important role in the economy, providing products and services on a larger scale than small businesses while still being more agile than large corporations. They typically face different challenges than small businesses, such as the need to balance innovation and risk, and the need to manage a larger workforce. With the right strategies and resources, MSEs can be successful and have a significant impact in their respective industries.

Steps of Medium-sized enterprise

1. Establish a business plan: Every business, regardless of size, needs a plan. This includes a detailed description of the company’s mission, competitive environment, and goals. It should also include a budget, marketing plan, and operational strategy.
2. Develop a culture: Establishing a culture of trust and respect is essential for any business to be successful. MSEs should focus on developing a culture of collaboration and innovation, where employees can express their ideas and feel supported.
3. Invest in technology: Technology can help improve efficiency and reduce costs. Investing in the latest technology can help MSEs remain competitive and increase productivity.
4. Hire the right people: Finding the right people for the right positions is essential for any business, but especially for MSEs. They should focus on finding employees who have the skills and experience necessary to help the company grow.
5. Seek funding: Funding is one of the biggest challenges MSEs face. They should focus on finding the right sources of funding, such as venture capital, grants, and loans.

Advantages of Medium-sized enterprise

The following are some key advantages of using an MSE:

• Access to economies of scale: MSEs can benefit from economies of scale to develop new products faster and more efficiently than smaller businesses.
• Access to capital: MSEs often have access to more capital than smaller businesses, giving them the ability to invest in more projects and launch new products.
• Access to talent: MSEs often have access to a larger pool of talent, allowing them to recruit the best people for the job.
• Ability to balance innovation and risk: MSEs are better able to balance innovation and risk due to their size and access to resources.
• Economies of Scale: MSEs are able to benefit from economies of scale, which allows them to produce goods and services at a lower cost per unit. This is due to their larger size, which allows them to purchase materials and hire labor at a lower cost.
• Innovation: MSEs have more resources and access to capital that allow them to develop new products faster and more efficiently than small businesses.
• Global Reach: MSEs often have a global reach, which allows them to access new markets and customers.

Limitations of Medium-sized enterprise

Medium-sized enterprises often face several limitations. These include:

• Limited access to capital: MSEs typically have limited access to capital, which can limit their ability to finance operations and expansion.
• Limited resources: MSEs generally have fewer resources than larger corporations, such as access to talent, technology, and data.
• Higher costs: MSEs are often subject to higher costs of operation due to their size, such as higher costs of labor, materials, and overhead.
• Limited reach: MSEs typically have a limited reach compared to larger companies, which can limit their ability to penetrate global markets.

Other approaches related to Medium-sized enterprise

• Financing: Medium-sized enterprises often have more resources to access capital than small businesses, which gives them more options for financing. They can also take advantage of government subsidies and incentives that are available to larger organizations.
• Strategic partnerships: Strategic partnerships can help MSEs access new markets and develop new products more quickly. They can also benefit from the resources and expertise of their partners, including technology, talent, and marketing.
• Technology: MSEs can take advantage of new technologies and tools to improve efficiency, reduce costs, and gain competitive advantages. They can also use technology to gain insights into customer behavior and develop new products and services.
• Human resources: MSEs typically have a larger workforce and need to manage a more complex organizational structure. They should be aware of the importance of developing strong leadership and having a positive work environment to attract and retain talent.

Overall, there are many approaches that MSEs can take to ensure success and maximize their potential. By understanding their unique challenges and leveraging the right resources, they can build a competitive advantage and have a positive impact on their respective industries.

Medium-sized enterprise — recommended articles

Micro-enterprise — Small enterprise — Technology park — Corporate venture capital — Inorganic growth — Small business owners — International joint venture — Financing of innovation — Universal banking

References

• Cook, P., & Nixson, F. (2000). Finance and small and medium-sized enterprise development. Manchester: Institute for Development Policy and Management, University of Manchester.
• Ciemleja, G., & Lace, N. (2011). The model of sustainable performance of small and medium-sized enterprise. Engineering economics, 22(5), 501-509.
• Mejri, K., & Umemoto, K. (2010). Small-and medium-sized enterprise internationalization: Towards the knowledge-based model. Journal of International Entrepreneurship, 8, 156-167.