The world’s biggest multinationals will see their profit growth drop by up to five percent over the next decade, according to a recent report by the McKinsey Global Institute.
That’ll leave a void in the global market that small to medium-sized businesses (SMBs) will fill. McKinsey predicts these companies will occupy 45 percent of the Fortune 500 list by 2025.
This remarkable shift is possible because of the tools small businesses now have at their disposal. Like David versus Goliath, smaller companies are taking on the multinationals. Read on to learn more about their advantages.
1. Increased flexibility
SMBs can take advantage of their small size and agility to seize new opportunities before bigger competitors can react. And, thanks to scalable cloud computing services, larger businesses are losing their old advantages, like dedicated IT infrastructures and in-house expertise.
Forbes predicts that 78 percent of small businesses will have adopted cloud computing solutions by 2020. With access to on-demand resource provisioning, even the smallest businesses can compete with the multinationals.
2. Increased visibility
The goal of marketing is to share a specific message with a specific audience. Or, if your product has universal appeal, with as large an audience as possible. Multinationals used to have all the advantages when it came to marketing, with plenty of money to buy radio and TV slots, place full-page ads in magazines and newspapers, and hire full-time PR and marketing teams.
Google and social media have changed that forever.
With Google AdSense, for example, small businesses can promote their services to an audience whose search terms identify them as likely customers. And social media platforms allow SMBs to find and connect directly with their customers no matter where in the world they are.
After all, if a two-coloured dress can get the whole world talking, then there’s no reason a small business can’t do the same.
3. Increased understanding
Sophisticated data analysis used to be reserved for multinationals with enough money for full-time ‘data mining’ teams. But the rise of Big Data has made analytics tools available to SMBs and even individual businesspeople.
For example, Google Analytics and InsightSquared allow SMBs to mine their data for valuable insights and turn them into easy-to-read infographics.
An (almost) level playing field
To be sure, multinationals still possess some advantages. For example, some own their entire supply and distribution networks, which means they can ‘outship’ smaller companies and reach consumers first.
The good news, however, is that SMBs are in a better position than ever before to compete. Using new technologies, they too can connect with customers across the globe and carve out a space for themselves in the fast-shifting global marketplace for goods, services and ideas.