• ISSN: 2301-3567 (Print), 2972-3981 (Online)
    • Abbreviated Title: J. Econ. Bus. Manag.
    • Frequency: Quarterly
    • DOI: 10.18178/JOEBM
    • Editor-in-Chief: Prof. Eunjin Hwang
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HOME > Archive > 2020 > Volume 8 Number 1 (Feb. 2020) >
JOEBM 2020 Vol.8(1): 30-37 ISSN: 2301-3567
DOI: 10.18178/joebm.2020.8.1.608

When Can SMEs Diversify? A Study of Growth Stage Model Analysis

Nia Kurniati Bachtiar

Abstract—Diversification is considered as one effective tool in expanding the business. However, different finding discovered in Small and Medium Enterprises (SMEs) where diversification is not the main priority even though it will help their growth. This qualitative study utilizes growth stage model as a framework to reveal in which stage SMEs can diversify. Hence, this paper aims to reveal the suitable stage where SMEs can diversify where the sample taken from SMEs in Java Island, Indonesia. The research discover that the opposite of Large Companies (LOs), diversification is not a powerful growth strategy for SMEs. Even though diversification is still a choice for SMEs, it cannot be done especially in the stage 1 (one) and 2 (two) of their growth. In explaining the diversification decision within SMEs, this article applies Threat, Opportunity, Weakness and Strength (TOWS) analysis to gain better understanding whether to diversify or not. Finally, this article provides proposed growth stage model to illustrate the most critical stage a business has to deal.

Index Terms—Entrepreneurship, growth stage model, SMEs, TOWS, diversification.

Nia Kurniati Bachtiar is with Universitas Muhammadiyah Magelang, Indonesia (e-mail: niakurniatibachtiar@ummgl.ac.id).

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Cite:Nia Kurniati Bachtiar, "When Can SMEs Diversify? A Study of Growth Stage Model Analysis," Journal of Economics, Business and Management vol. 8, no. 1, pp. 30-37, 2020.

Copyright © 2020 by the authors. This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited (CC BY 4.0).

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