African Labour Economics (Economics/Social crossover) | 24 November 2006
SME Integration Strategies in South African Dynamics: A Comparative Analysis
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Abstract
Small and medium-sized enterprises (SMEs) play a crucial role in South Africa’s economy, particularly in fostering economic growth and job creation. A comparative analysis of case studies from three major industrial sectors (agriculture, manufacturing, and services) was conducted using semi-structured interviews with key stakeholders. The findings indicate a significant trend where large firms predominantly focus on vertical integration strategies to enhance supply chain efficiency and reduce costs. Large firms are more inclined towards leveraging their market power and resources for vertical integration rather than horizontal expansion or direct investment in SMEs. Encouragement of public-private partnerships could facilitate more substantial investments by large firms into local SMEs, promoting broader economic benefits.