The strategies used by SMEs to survive during economic crisis in the Sultanate of Oman

Abstract

It is said that 97% of the economy of the earth comes from small and medium sized enterprises (SMEs). Most manpower employed worldwide are by SMEs. SMEs in general, play a very crucial role for the development of a country. In developed nations, SMEs contribute to 60% of the country’s economy while SMEs in Oman contribute only 15%. Oman is classed as a developing country hence the SME scene is still raw. Depreciation in the price of crude oil put a lot of pressure in Oman’s economy for the last couple of years since oil revenue accounts for about 60% of the country’s earnings. During the times of economic crisis, the SME section are the ones who are affected the most. They pass through a gloomy phase that create a negative impact on their business returns. This study delved into various approaches taken by SMEs to survive the economic crisis which is stunting the growth of the country. A qualitative research was conducted among several SMEs in Oman. In-person interviews were administered, and questionnaires were handed out to the SME owners. The results showed that the SME owners had to conduct major layoffs. Using only the core workforce was one of the major strategies utilized by the SMEs.  The owners didn’t expand their businesses, rather focused on expanding their products and services to reach a larger target audience. Discounts, offers, extensive external and social media marketing were also critical means of survival. Most of the SMEs are optimistic and are receiving a lot of assistance from the Public Authority for SME Development (Riyada) of Oman to ensure their survival