Southern Technologies: A Case Study in SME Management and Strategy

This report provides a comprehensive analysis of Small and Medium Enterprises (SMEs), focusing on the management practices, growth strategies, and competitive advantages within the context of the UK economy. It examines the entrepreneurial ventures, start-up processes, and the importance of business concepts and competitive advantages. The report uses Southern Technologies, a UK-based SME, as a case study to illustrate these concepts, including financial strategies, resource management, and market positioning. It also delves into the challenges faced by SMEs, such as trustworthiness, regulatory compliance, and cybersecurity threats, and explores potential government support measures. Furthermore, the report offers recommendations for future growth and development, emphasizing the importance of adaptability and strategic planning in the ever-evolving business landscape. The analysis includes a review of the fintech company Iwoca, highlighting its role in providing financial services to SMEs and its competitive strategies in the market. The report concludes with a discussion on the overall performance of SMEs, particularly in the fintech sector, and the need for robust cybersecurity measures to protect sensitive data.

MANAGING SMALL
AND MEDIUM
ENTERPRISES

Contents
INTRODUCTION.......................................................................................................................................3
Entrepreneurial Venture..........................................................................................................................3
Process of SME start-up..........................................................................................................................3
Concept of business and competitive advantage......................................................................................4
Demand and Competitive Environment...................................................................................................4
Growth of company.................................................................................................................................5
Challenges in managing business............................................................................................................5
Any government support measures that may be available to help the business overcome the challenges
faced........................................................................................................................................................6
The SMEs current growth and development strategy..............................................................................7
RECOMMENDATIONS.............................................................................................................................7
CONCLUSION...........................................................................................................................................7
REFERENCES............................................................................................................................................8

INTRODUCTION
This report revolves around small and medium enterprises and help in understanding how small
and medium enterprises are managed and handled in different perspectives. This report help in
understanding how small and medium enterprise functions and different work process which are
involved in small and medium enterprise functioning. This report focuses on organization
Southern Technologies which is an SME based in UK. This report also focuses on strategy which
is been used by Southern Technologies to be competitive in market and helps in understanding
how finance of organization are used and help in understanding importance of resources for
small and medium enterprise in current market scenario (Abdulaali, Alnoor and Eneizan, 2019).
Entrepreneurial Venture
A small business has less resources and annual revenue than large and medium company.
Entrepreneurial venture is a concept of offering a product of service with an intention of giving
competition to competitors and profit maximization. Iwoca is medium sized enterprise which
provides financial services to small business. It was established by James and cristoph with the
aim of helping small businesses. Iwoca main focus is on lending money to small businesses
which were left behind by banks that’s why it is able to growing rapidly. Iwoca is giving
competition to its competitors by reducing paperwork. It lends services by using lightning-fast
software which helps in profit maximization.
Process of SME start-up
As mentioned above Iwoca was established by James and cristoph. Both were working in a
finance company. After working there, Owners of iwoca have an idea of starting a new
business .Idea is only aims to small businesses. Company provides loans up to $250,000. Before
starting new business, conduction of market research is necessary. Market research tell about the
competitors. If there is high competition then business idea must have something unique to give
competition to competitors. After all the market research company writes its business plan which
includes objectives, what methods can be used in order to achieve that goals and how much time
will be taken in achieving the goals. Business plan is formal written document. Main part is
funding of the business. Company is funded by sixteen investors. Company’s latest fund was
raised on 3rd august, 2020 and it was funded by insight investment and capability and innovation
fund. Till now, total funding amount is $605.5M.Company’s location is London, England. As it

is medium sized enterprise and has small number of employees so all the power is in owner’s
hand. After that registration of company is necessary (Klepić, 2019).
Concept of business and competitive advantage
Iwoca is a fintech company means it is mixture of finance and technology. Technology makes
company more advance and efficient. Company uses new technologies such as machine learning,
internet of things, artificial intelligence, HTML5, Google analytics, jQuery and cloud computing
which leads to growth of company. These technologies drive consumer preferences. Company
enhances its operations and financial service delivery by using technology. It provides
automated and improved financial services. Company uses fast and innovative progresses such
as mobile payments changed the way of managing finances. Company also uses software which
helps in providing load to small businesses. By introducing new technologies, paperwork has
been reduced. Customers can apply online for the loan by filling form and can attach all the
required documents with the help of technology. That’s why company is able to attract more
customers (Majama and Magang, 2017).
company uses many factors that allow it to produce goods or services more cheaply than its
competitors. Many companies are providing SME lending and some companies have more
advanced credit product than Iwoca but industry leading analytics and technologies used by
company is set it apart from others. This is the main competitive advantage that others will find
to replicate.
Demand and Competitive Environment
Demand for fintech companies has been risen. In forecast period of 2019 to 2025 CAGR growth
of the company is 25% to 30%. Earlier, underwriters have only few data sets for assessing risk
which results in charging higher interest loans. With the help of technology company can assess
risk associated with loans with large data sets and company is able to charge interest rate
accordingly. Cheaper interest rates attract more customers .This is the main advantage company
has. Company provides plenty of services that include banking, investing, borrowing and saving.
It provides new options too like purchasing insurance and mortgages that’s why company’s
demand is high in the market (Maksimov, Wang and Luo, 2017).

Competition faced by company is very high because there are lots of companies which provide
same services and products. Competitor companies of Iwoca are zopa, Funding circle, Ebury
and standard chartered. All these companies provides load to businesses and giving tough
competition to Iwoca. But company uses advanced technology that makes it different from
others.
Growth of company
Iwoca focuses on unlocking economic growth. Iwoca has been named as fastest growing UK
business for international growth. In quarter 2 of 2021 company’s revenue was $59.1million.
Company’s most recent funding amount is $112 million and there were 9 funding rounds. In
November, 2020 Company made one of its service named iwoca pay completely free. Company
aimed to provide loan of $200 million before January 2021. Company came into front in this
pandemic time to help small business by launching coronavirus business interruption loan
scheme. This scheme added another $100 million for small businesses. Company provides
finance to more than 50,000 businesses and earned profit of more than $2 billion (Naude and
Chiweshe, 2017).
Challenges in managing business
There are many challenges company faced when it started its business. Some challenges are
as follows-
 Trustworthiness- Building trust among customers plays an important role for company.
Company not only has to convince customers to trust their brand but also make them
understand that their product is crucial. Company focuses on 3c’c – Credibility,
Corporation and customer experience.
 UK fintech regulations- As company is mixture of finance and technology it has to face
many strict regulations. As company is smaller and operates with fewer resources so risk
comes down to a single team member, which can be a stressful situation. Company also
involved with international trade so company has to face regulations of other countries
also.
 Cyberthreats – Cyberthreat is another major challenge that is face by company.
Company always tries hard to protect itself from cyber threats. Company uses right cyber
protection and data security. As company deals with large sets of data which includes-

Personal information, contact details and financial information of customers. This data
helps in generating insights related to customer purchase patterns. However, maintaining
the security of this data is very challenging for the company. Company uses right data
protection solution that helps in protection against ransom ware (Prieto‐Sandoval and et.
al., 2019).
Any government support measures that may be available to help the business overcome the
challenges faced
For the purpose of growth SMEs all around the world need to make sure that they are developing
a good policy for the same. In case with IWOCA They need to make sure that all their
entrepreneurial system are nurtured so that they can grow easily. According to various reports it
has also been found that almost 47% of the revenue of UK’s economy is due to the contribution
of various SMEs that are prevailing there. So in short it can be that SME is playing very crucial
role in boosting the economy, Not only that they also need major support from general public
from local government and national government so that they can expand their business and they
can increase their impact in the society (Sallem and et. al., 2017). IWOCA being one of the
major fintech companies which is in London it offers various types of financial support financial
facilities to various different small businesses and businessmen's. With the help of money they
lend they make sure that all the money that they are lending to the customer is being used so that
the customer can keep his or her cash flow smooth. There are various ways and strategies
through which IWOCA can make sure that they are growing in a significant manner and these
strategies are as follows:
1. Market penetration- With the help of reducing the price they can easily conquered the
market and they can penetrate the market for the big companies. This strategy will help
them gain a good market share at their initial period.
2. Market development- They can develop their product so that they can target new market
And in the new market what they can do is they can they can promote their existing
products with existing promotional strategies. this will also help them target add new
market and acquire high market share

The SMEs current growth and development strategy
According to various other reports it can also be seen that the SME which are outside are
producing 3 times more innovative ideas and more innovative products as compared to the SME
that are in UK. What UK government can do is that they can provide subsidiaries to various
SMEs so that they can easily grow in the country. IWOCA With the help of subsidiaries the
government is giving can make sure that they are you utilizing that subsidiary's. UK government
can also make sure that they are providing enough support and enough motivation to the SMEs
that they can easily make themselves work.
RECOMMENDATIONS
It can be recommended that company is only focused on giving loans to small businesses.
Company can grow more rapidly if it starts expansion in different fields like – insurance,
mortgages etc. Company has to work on cyber security as cyber theft is increasing day-by-day.
Technical architecture must be secure of the company otherwise company can lose its customers
because of trust issues related to their personal data.
CONCLUSION
From the above report, it can be concluded that small and medium sized enterprises of
fintech domain are growing rapidly. As Iwoca is Fintech Company, mixture of finance and
technology it is taking finance industry to the next level by making financial procedures
customer friendly that reduces paper work and saves time. Company’s main objective is to
provide loans to small businesses. Company is doing better in recent years as its main focus is on
small medium enterprises. Main finding of this report is that company’s is growing because it is
only focusing on SME’s. Even in pandemic company did well because it granted loan to the
customers in tough time. Company provided loans to companies even after pandemic that proves
company is performing better in every aspect. As company uses technology, Company needs to
protect itself from cyber threats. Thus, it can be said that company’s overall performance is very
good.

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