Specialization of French SMEs

In various fields such as research & development, mass communication, and access to the media, there seems to be no competition between French multinationals and SMEs. Multinationals have more capital to work within each of these sectors. However, SMEs can compete with their strengths by attacking multinationals in niche markets, or by highlighting proximity to the end customer.

With well-thought-out ideas and by targeting a niche market, an SME can grow to the level of a multinational. 

By definition, a company is an economic agent that produces goods and services intended to be sold on a market to satisfy a need and make a profit. The satisfaction of needs is, therefore, a fundamental element for the sustainability of a business. When a specific product or service meeting the needs of a niche market is not already adequately addressed by multinationals, an SME has a large customer base in the same market than a multinational.

Let’s take the case of UBER in the city of Paris, for example. UBER is a multinational company operating in private passenger transport at a relatively high price and only in large cities. In parallel, some SMEs have set up an alternative based on the carpooling system. However, their service is only for inner-city journeys, not only in Paris but also in smaller cities. These companies are tackling UBER on a niche market, targeting people who need to move within a city and have no problem sharing their trip with others. 

This specialization on niche markets allows proximity to the end customer. This proximity is undoubtedly an advantage for SMEs because it makes it possible to identify customers’ needs better and provide detailed, fast, and accurate responses to those needs. For example, an SME specialized in fast food will have more flexibility than a multinational company to improve their recipes and design its menu card based on customers’ feedback. 

The best way for SMEs in France and all over the world to carve out a market for themselves is to specialize. Taking advantage of the manoeuvrability of a smaller company is the best way to succeed in a niche market.

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