Role of Innovative Marketing Strategy for Success of Micro, Small, and Medium Enterprises (MSMEs)

Abstract

Large frms are a threat to small businesses in all countries (Wanninayake and Chovancova 2013). “The Government of Sri Lanka recognizes MSMEs as the back bone of the economy” (Gunawardana 2016, p. 3). MSMEs in Sri Lanka have been struggling to compete with other frms (Vijayakumar 2013; Gajanayake 2010). In addition, the postwar environment of Sri Lanka contains huge problems and chal lenges (Shivany et al. 2015). “In 1983, 98% of MSMEs accounted for 48.6% of total employment and 31.1% of value added. In 2008, 93% of MSMEs accounted for 29.6% total employment and 20.3% of value added, this evidence clearly shows clearly the poor development of MSMEs” (Vijayakumar 2013, p. 41). Even though MSMEs have accounted for a vast percentage of establishments in Sri Lanka, their contribution to the economy is very low (Vijayakumar 2013). Earlier studies empha sized that MSMEs in Sri Lanka have been struggling to compete with nationally and internationally branded products (Vijayakumar 2013; Gajanayake 2010; Pushpakumari and Watanabe 2009). “Soon after the war, local productions were subjected to a market shock as road connectivity resumed to the wider market with far more advanced production” (Sivatheepan et al. 2018, p. 9). Most of the MSMEs were collapsed and destroyed by internal war while the remaining enterprises in Sri Lanka were vulnerable (Sivatheepan et al. 2018). MSMEs in the Northern Province have not been well developed and have thus diminished over 10 years. MSMEs make a vital contribution to GDP in Sri Lanka. In the Northern Province, more than 99% of enterprises are MSMEs.