UNIVERSITY OF ESWATINI

FACULTY OF COMMERCE

DEPARTMENT OF BUSINESS AND ADMINISTRATION

PROGRRAMME : BACHELOR OF COMMERCE_ FULLTIME

COURSE CODE : BUS 303

LECTURER : MISS Z. MABUS4LA

STUDENT NAME : SANELISO MOTSA

STUDENT ID : 202101705

TITLE OF PAPER : ASSIGNMENT ONE

The relationship between creativity, competitiveness and small business management

International certification for businesses helps organizations improve their performance, customer
satisfaction, and competitiveness. However many small businesses do not signal their quality by having
the quality of their products and processes certified by external auditors and certification bodies. These
companies lose out on domestic, regional and international markets with customers that prefer certified
suppliers. To buyers an international certification signals that the enterprise’s managers have the right
practices in place to make high-quality goods and services which in turn reduces the costs of the
suppliers having to communicate the quality of their products.

A well managed firm uses its resources effectively and produces efficiently which makes them more
competitive and profitable because they are able to use more of their production capacity and above
that, deliver their products on time.According to the survey, on average, firms in Eswatini that had been
operational in the previous 12 months used 54% of their capacity. Also, a third of firms that were
operational delivered less than half of their output on time.This data proves that small businesses need
to be innovative, come up with ideas on how to improve their production techniques so to be effective
and be timely on deliveries because failure at such will negatively affect buyer–seller relationships.

Research and development fosters innovation needed to stay ahead in an ever-changing competitive
landscape. through increased market share and enhanced business processes One in five (19%) surveyed
Swazi firms frequently develops and implements new or improved products or processes. Identifying
and selecting suitably skilled workers is vital for innovation meaning that an established and structured
hiring process is essential. The survey shows that two-thirds of companies have weak hiring processes,
which makes it harder for them to find the best candidates

Reasons why SMMEs fail in Eswatini

Lack of entrepreneurial spirit and financial & business management skills.

Lack of proper business management which is common amongst small businesses in Eswatini prevent
companies from functioning in an efficient, competitive and profitable way. Only one in three surveyed
firms (32%) report having a high ability to manage cash flow and one in three firms (30%) have a high
ability to manage their inventory. Just 14% of firms that keep no records and 15% of firms that have no
bank account have strong cash flow management

Lack of entrepreneurial culture -

Lack of management and business development abilities of the SMME owners to establish long-term
vision and be pro-active is a challenge. Limited appropriate,

Lack of access to available markets

Smal businesses in Eswatini lack access to local, regional and international markets that will provide
scope for increased scale and investment for these businesses to be competitive. Since most of small
companies do not invest in having their businesses certified by international bodies. Hence, they find it
hard to get customers to supply. According to the survey, only 10% of Swazi firms hold an international
certification. This indicates that very few businesses have the ability to sell to their customers without
communicating the quality of their products which is costly.

Increased costs of doing business

This is due to lack of affordable premises coupled with finding premises to reduce average cost of
production. Premises are leased out at high prices thus increasing the costs of doing business for the
small companies since most of these entrepreneurs the do not have access to sufficient funds. They
mostly rely on savings or borrowing from relatives which may not be enough to rent a space for doing
business.

Lack of access to finance

This is due to lack of awareness of available credit facilities and lack of collateral. collateral is a
prerequisite of banks when giving funds to a business and this hinders small companies from accessing
funds because most of them do not have assets to offer as collateral.

Insights on the competitiveness report of 2022

Invest in management capabilities for stronger business fundamentals. Basic business management skills
are lacking in the SME sector in Eswatini, small firms suffers from poor management practises with
two-thirds of surveyed firms keeping records almost half are without a bank account, this poor
management practises explains the low level of productivity of many firms in the SME sector.

Firms stand to benefit from increased level of finance. Poor access to financial is a serious obstacle to
business operation, training should be given to firms that educate them on how to prepare a business
plan and how to correctly fill loan funding application.

Encourage certification for market-driven value chain ungrading. When buyers require their suppliers to
get certified to a standard, this can leverage improvements in production processes in the supplier firm.
When the small companies are certified to certain standard it can encourage the large companies to
source they products locally because they will be assured of the quality.

Stronger business networks help to strengthen local suppliers. Business networks are critical when it
comes to accessing market intelligence. In Eswatini information on availability of new potential buyers
and about prospective buyers and suppliers is scarce. The absent of market intelligence about new
buyers and existing customers makes its hard for companies to know how to improve their offerings to
attract new customers.

Encourage innovation to compete with foreign input. Innovation level are low in Eswatini, only a small
portion of firms of firms in Eswatini develop and implement improved products and processes and also
firms invest less in research and development, yet innovation can help firms improve their management,
business processes and ultimately lead to improved products. This can help them to compete with South
African imports and makes them more attractive to local buyers