The world's small and medium-sized enterprises face some serious competition against multinational corporations (MNCs) when entering new markets. The vast crowdsourced, brand recognition and economies of scale that MNCs command serve as major hurdles that SMEs feel they must overcome to be successful when competing against them.

However, with the right strategies in place, small and medium businesses can generate their own profitable ventures and surely find their success. By leveraging strengths that larger corporations lack, small and medium-sized businesses can effectively compete with their larger counterparts in the global marketplace.

Related: 6 ways small businesses can win with big corporations

Ingenuity and innovation

One of the biggest competitive advantages that SMEs have over MNCs is Versatility. Unlike their larger competitors, where layers of bureaucracy often get in the way of decision-making, smaller businesses must be on the lookout for changes in customer needs or market environments. By focusing on agility, smaller businesses can more easily make adjustments to their business models and processes. These quick orientations to market changes and customer needs translate into growth. Smaller companies are perfectly placed to innovate significantly faster and create a unique mix of products and services in ways that MNCs simply cannot.

A good way to take advantage of the flexibility of a smaller company is to use one Employer of Record (EOR) to quickly enter new markets and innovate based on local information rather than waiting for long-term trends to emerge. EOR service providers like INS Global make it easier for small and medium-sized businesses to quickly move into a new market without the cumbersome process of setting up a local unit. Using EOR, small and medium-sized businesses can hire employees in foreign countries while complying with local laws and regulations. This strategy will not only help maintain agility, but also allow small and medium-sized businesses to focus on innovation and growth with more time-sensitive information specific to a foreign market.

The meteoric rise of Crumble cookies can be attributed to his versatility. The company's unique approach involves rotating its menu every week and creating excitement among customers through platforms like Instagram and TikTok. Its limited-time cookie options and social media presence have turned Crumbl Cookies into a viral sensation, with fans posting stunning photos and videos, further increasing brand awareness. If Crumbl Cookies only sold the same six flavors of cookies at any given time, as larger companies usually do, it would not have been as successful.

Related: 4 ways small businesses can compete against major competitors

Creating a competitive advantage with a customer focus

Creating more personalized customer experiences with an emphasis on understanding customer preferences, SMEs can compete with MNCs.

According to Salesforce's 2024 State of the Connected Customer report, 65% of customers expect companies to adapt to their changing needs and preferences, but 61% of customers say most companies treat them like a number. In today's era, an improved customer experience has consistently been shown to yield higher profitability. By providing personalized experiences and quick responses to customer inquiries, small and medium-sized businesses build loyalty and a long-term customer base.

Beautiful Disaster online women's clothing boutique offers a compelling case for building a company based on a strong brand identity, target audience and sense of community. What was once just another online clothing store, Beautiful Disaster, is known for having a unique identity that its customers embrace. The company also fiercely embraces and responds to customer feedback, giving it the competitive edge of being willing to openly improve in terms of product and service options, garment quality and garment durability. MNCs may be able to focus on only one area of ​​the customer experience at a time, while small and medium-sized companies may focus on holistically improving multiple aspects of the customer experience at the same time, giving them a clear customer advantage. This multi-faceted approach to the company has allowed Beautiful Disaster to reach over $12 million in annual sales.

Using social media and digital platforms, you can effectively connect with your audience, achieve direct engagement and increase customer retention. Identify untapped positions in highly competitive industries through the use of differentiated value propositions and high-touch customer relationships.

Related: 3 Effective Engagement Tactics to Help Small Businesses Create Authentic Connections with Customers

Actionable insights for entrepreneurs

To compete with the largest companies in the global market, consider implementing a combination of these strategies:

Embrace technology: Use digital tools and platforms to improve operational efficiency, strengthen customer engagement and streamline processes. For example, having a strong CRM email marketing or social media management tool can simplify the job AND allow reaching more personalized and targeted customers.

Focus on the niche market: Enter niche markets with limited depth where larger competitors may not have much choice or lack flexibility. Develop products or services to meet the needs of those markets.

Build your brand: Build your story and tell it in a way that resonates with your target audience. Authenticity and transparency are built brand loyalty driving consumers to small and medium-sized businesses instead of larger competitors.

Use data analytics: Use data to gather insights about the behavior patterns and preferences of particular customers. This can provide small and medium-sized businesses with powerful information that can be used to develop and execute their products and marketing strategies.

Strategic partnerships: Partnering with other businesses can be a great strategy, especially if partnering with businesses that already have a foothold in a market. For example, Lucy cookiesa small business, entered into a partnership with Starbucks to meet the needs of customers with dietary restrictions and now sells its cookies in Starbucks stores, creating a beneficial partnership between the small business and the MNC.

In conclusion, small and medium-sized businesses can compete with multinational corporations in the global space by leveraging, rather than minimizing, their size. This very change gives small and medium businesses the exact edge they need towards creating their own space to thrive.