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Abstract
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Article Information:
Competition and Management Issues of SME Entrepreneurs in Laos: Evidence from Empirical Studies in Vientiane Municipality, Savannakhet and Luang Prabang
Nittana Southiseng and John Walsh
Corresponding Author: John Walsh
Submitted: 2010 June, 16
Accepted: 2010 August, 19
Published: 2010 September, 30 |
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This study analyses competition and management issues of Small and Medium Enterprise (SME)
entrepreneurs in three provinces of Laos: Vientiane Municipality (the capital city), Savannakhet (an important
economic development zone) and Luang Prabang province (a famous historical site and tourist destination).
Competition and management have changed dramatically after the introduction of the New Economic
Mechanism in 1986, which moved the economy from central planning to market-based economic management.
Qualitative research was used, with 52 in-depth personal interviews conducted and combined with behavioural
observation and content analysis of secondary sources of data. R esults indicate the importance of SM Es in the
Lao economy, with some 74% of total enterprises being family-owned SMEs. These concentrate on food
processing, garment production, construction materials, wooden furniture, tourism, education, trading,
transportation, internet services and others. Increases in the SME sector have contributed to job growth and
overall GDP growth. Findings also showed increased competition in the sector as substitute products are
introduced, with significant bargaining power for buyers and a high rate of new entrants into a limited range
of product/service markets, without much competition in terms of price and quality of goods and services.
Entrepreneurs find it difficult to access modern technology and finance, have limited resources in terms of
capital and skill and must also negotiate unfair treatment by officials. Management styles usually focused on
short-term day-to-day objectives and few were able to consider longer-term considerations or business
sustainability. Skills management and capacity building in these SMEs were narrowly conceived and required
to be profit-based. Training and development of human resources was seen as a cost rather than an investment.
Recommendations are made for enhancement of SME productivity and capacity.
Key words: Competition, entrepreneurs, Laos, small and medium enterprises, , ,
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Cite this Reference:
Nittana Southiseng and John Walsh, . Competition and Management Issues of SME Entrepreneurs in Laos: Evidence from Empirical Studies in Vientiane Municipality, Savannakhet and Luang Prabang. Asian Journal of Business Management, (3): Page No: 57-72.
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ISSN (Online): 2041-8752
ISSN (Print): 2041-8744 |
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