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Strategies for Sustaining SMEs Operation: A Case Study of Construction SMEs in London

STRATEGIES FOR SUSTAINING SMALL AND MEDIUM ENTERPRISES (SMEs): A CASE STUDY OF CONSTRUCTION SMEs OPERATING IN LONDON

1.0 Outline

According to (Koporcic 2020), more than 70% of Small and medium enterprises are registered as micro-businesses in United Kingdom. This is an indicator that the efforts of developing businesses in UK are far from decline. The activities and outputs of small and medium enterprise (SME) businesses are significant to UK’s economy (Construction Industry Training Board, 2020). SMEs businesses are divided into micro, small, and medium sized enterprise organizations. The Department of Business, Energy, and mechanical technique (BEIS) revealed that; as at present, SMEs contribute to 99.9% of the total 5.9 million businesses in the UK. Large business establishments account for the remaining 1% of businesses in the territory. Towards the start of 2019, 60% (16.6 million) of the employed people were working at SMEs. In terms of turnover, 52% (2.2 trillion) resulted from the SMEs sector (BEIS 2019). In 2018, BEIS also released comparative population statistics which showed that 99.9% of all 5.7 million enterprises were SMEs, 16.3 million employment in the UK which represented 60% of the total and 2.0 trillion turnovers representing 52% of the total were provided by small, and medium sized enterprises (SMEs). London has the largest number of SMEs among cities in England as well as UK because it houses 246400 SMEs. In comparing London with other regions, closely following it are the South East which contributes 14% (232,800) of the UK’s SMEs while the North West houses 10% (176,850) of SMEs. Conversely, the UK regions with the least number of SMEs are Northern Ireland with 48,860 SMEs, Wales with 73,820 SMEs and the North East with 86,170 SMEs. This indicates that London is the capital of SMEs in UK as most small and medium business owners prefer establishing their enterprises in the city to setting them up in other regions.

However, the Office for National Statistics (ONS) and BEIS in 2018 and 2019 released results that uncovered that a great deal of SMEs in the UK collapse before turning to five 5 years of consistent activity. The ONS reports the survival rate of businesses in the UK after 5 years. In 2018 the survival rate of SMEs established or enrolled in 2012 and still active in 2017 was reported as 43.2%. In 2019, the survival rate was reported as 42.4% for businesses that were established or enrolled in 2013 and still actively operating in 2018. Therefore, these revealed survival rate statistics demonstrate that over half of SMEs in the UK have crumpled and stopped dynamic activity and turnover in the two referenced periods. Business mortality is undesirable on the grounds that no business is set up to fall flat. In light of the standards of entrepreneurship, SMEs are essential to a developing economy.

The construction sector is one of the most significant contributors to the economic growth in UK. It accounts for 117 billion (6%) of the collective economic output. It is also liable for 2.4 million job positions of the total workforce in UK. BEIS (2018) established that this sector had the largest share of SME in 2018 and still held up a similar situation in 2019 by housing 18% of all UK SMEs in contrast with other SMEs such as: Wholesale and Retail Trade; Repair of Motor Vehicles and Motorcycles which house just 9%. BEIS (2019), reveals that (SMEs) with operations in construction are fundamental in the overall operation of construction industry activities.

Unfortunately, the survival rate of construction SMEs has remained generally low and therefore, the rate of collapse has stayed high. With reference to the findings by ONS, the 5-year survival rate of construction SMEs active in 2018 after registration in 2013 was 43.5% while that of SMES established in 2012 and still active in 2017 was 42.9%. The mortality rates were 56.5% and 57.1% respectively. Concerns in the construction SMEs additionally emerge from the fact that in spite of the enormous extent of construction SMEs, the 12% turnover to the UK economy isn’t noteworthy and could be viewed as moderately little when contrasted with the 34% turnover recorded for the entire Wholesale and Retail Trade; Repair of Motor Vehicles and Motorcycles sector which represents just 9% of the collective SMEs.

1.2 Rationale

The subject of the proposed research is convenient and significant on the grounds that SMEs in the construction sector are significant contributors to employment and UK’s economy. The results that have been published reveal that; in 2019, Construction SMEs resulted to one fifth of the 5.9 million SMEs in the UK, contributed to 12% turnover and provided job opportunities to 11% of the collective taskforce (BEIS 2019; Chris 2019). In a similar manner, Likewise, in 2018, construction SMEs represented 17% (around 992000) of all 5.7 million enterprises in the UK. Also, they led to an 8% of UK turnover and gave work to 8% of the UK’s collective worker population (BEIS 2018; Chris 2018).

However, the survival rate of construction SMEs has remained relatively low. Out of the 11,030 number of construction enterprises (operating in the construction of buildings) established/registered in the year 2013, only 4,370 numbers (i.e., 39.6%) were still active in the year 2018, which means that about 60.4% died/collapsed within five years of operation. The continuous occurrence of the high death rate of construction SMEs may have a negative impact on the economic productivity of the UK, which is reportedly performing poorly already (Great British Business 2020). Thus, an extensive study on SMEs in the Construction Industry in the UK is important to provide knowledge on a holistic approach and strategies that could serve as a guide to construction SMEs to ensure the sustenance beyond five years of operation.

In this study, the researcher will seek to explore and analyze the strategies used by surviving construction SMEs (who have survived beyond five years) with the intent to use the findings to develop an evidence-based business strategy model that owners of upcoming and struggling SMEs in the construction sector can adopt to sustain their business operations.

A study by Lechner and Gudmundsson, (2014) revealed that a viable business system is critical to the achievement of the goals of a business. In this study, the researcher will investigate the systems that add to the survival SMEs in the industry of construction. The discoveries may build the information and comprehension of the business methodologies utilized by construction SMEs in London to survive past 5 years. Lechner and Gudmundsson (2014), discovered that the procedures actualized by businesses impact execution and portrayed the competitive advantages made by SMEs that execute key procedures, structures, and practices. The competitive advantages recognized by Lechner and Gudmundsson (2014), included: management of risks, aggressiveness, strategy, and innovation.

In this specific study, the exploration will include the assortment of essential information from the owners of construction SMEs, examination of gathered information, discussion of result and formulation of the conceptual model.  The supplementary data will be gathered through a survey of organizational reports of the selected SMEs. Such information will represent the basis to confirm and support the data from the interview with SMEs owners. Review of expert scholarly literature will assist with distinguishing and establishing the fundamental expert and scholastic hypotheses of business procedures in SMEs and especially the strategic framework being used at Construction SMEs, analyze the current strategies for sustaining SMEs in competitive industry environments, study market situation and business rivalry among Construction SMEs operating in London.

1.3 Relevance

This pilot study will be pertinent to the author’s professional doctoral investigations as the discoveries from this pilot study will be used as a reference source and for examination in the primary thesis’ qualitative discoveries. The findings from the research may contribute to existing theories and research on SME business as it is expected to highlight the relevant factors that determine business sustainability in the London region of the UK. It may also provide the basis for future research on sustainable business strategies in different regions of the UK individually or in comparison.

Also, the findings from the proposed research may lead to the development of a business strategy model suitable for use as a guide to sustaining struggling construction SMEs beyond five years of operation. The knowledge from the findings may help to improve the survival rate of construction SMEs in London and in the UK entirely. The application of the knowledge and recommendation from the outcome of the proposed research may indirectly improve the economy and employment rate in the UK.

Understanding the strategies utilized by entrepreneurs the achievement of their business objectives may prepare new and failing entrepreneurs with information for expanded business sustainability. Through the publishing of the discoveries of this s qualitative multiple case study, the researcher seeks to add to the assortment of information on viable strategic approaches of successful SMEs in London. This study might be of importance to the field of business in light of the fact that the discoveries could increase the knowledge and understanding of business strategies and may give new bits of knowledge supportive in expanding the achievement rates for new construction SMEs.

 

2.0 Literature Review

Review of literature in this pilot study seeks to offer an understanding and review of studies that are most relevant in relation to the topic of business survival for SMEs in the construction industry in London. Saunders et.al., (2007 p.95) defines a literature review as ‘the description of merits and limitations of the literature within a selected area of research’. Reviewing literature is imperative for the establishment of a proposed research within the contest of literature that relates to the subject being researched. A theoretical framework is necessary for guiding the entire process of a research study. Therefore, in the first part, the author will provide information on the resource-based theory which is the theoretical framework choosing to structure the research. Other sections of this review explore and synthesize relevant literature to establish the rationale and the need for the proposed research.

The purpose of the research is to explore the strategies used by construction SMEs in London that have succeeded in business for a minimum of five years. According to Wedawatta & Ingirige (2016), such strategies are valuable considering that SMEs provide the most employment opportunities to the citizens in the workforce. Therefore, the second subsection will review the business literature of SMEs, with relation to sustainability strategies, and the factors that may lead to success.

2.1 Resource Based Theory (RBT) and Small and Medium sized Enterprise (SME)

As per the resource based theory (RBT), the strategic resources possessed by a firm or a SME (that could also be referred to as a business, an organization, a company, an enterprise, etc.) have the capacity to facilitate sustainable competitive advantage within the market where such firm operates (Barney et al. 2012). Barney Jay B. developed the theory in 1991. The theory was followed up with further information by the same author in 2001. Barney (2001) contends that competitive advantage represents a fundamental pathway of a firm to attain success through corporate strategic choices that leads to sustainable or long-haul growth.

This study utilizes RBT as the suitable theory because it is a strategic theory that can help the researcher to understand; performance differences among firms in the same industry and how a firm tends to gain competitive success. From an entrepreneur’s perspective, the RBT takes into account the concept of strategies development and resources own or control by a business. The RBT framework provides a clear picture of the link or relationship that exists among the fundamental characteristics of an organization including the resources own by the organization, the capabilities/competencies of the organization, business strategies, key success factors, competitive advantage and performance. The performance outcome in the case of RBT theory may either represent business survival followed by growth and then sustainable growth depending on the type of competitive advantage that a company managed to achieve, or non- survival and business death if competitively disadvantaged.

2.2 Complementary theory and critiques about RBT

There are similarities that exist between the RBT and SWOT as indicated by literature. In the first place, the concept of internal and external forces in SWOT is closely related to the concept of internal and external resources in RBT. Secondly, both frameworks reportedly represent appropriate tools for the assessment of business success and sustainability (Tomczak et.al. 2013). Day (2014) and O’Donnell (2014) have revealed that RBT centers exclusively on internal attributes of a small business, maintaining that such attributes may include: steady cash flow, and borrowing capacity. Lonial and Carter (2015) contended that SMEs tend to maintain resourcefulness, success, and profitability for sustenance, provided the owners invest their efforts to complement and sustain the steady flow of resources.

Contrary, the use of RBT in management strategy research has been criticized by some scholars. Abdelgawad et.al (2013) had warned the applicants of RBT about the uncertainty of assessing the internal resources of a businesses, arguing that skillful small business owners may reallocate and adjust business resources to alter the competition (Barney 2014). Rashidirad et al. (2015) had highlighted the criticism by scholars regarding the failure of traditional RBT to explain how resources can apply and translate resources to competitive advantage. Some authors also contends that the high emphasis placed on individual resources as opposed to whole resources of a firm in traditional RBT is tantamount to reductionist approach and that this has led to inconsistency in the interpretation of findings in researches that investigated the impact of individual resources on organization performance (Lonial & Carter 2015).  However, the updated version of RBT underpinned by the VRIO framework has addressed these criticism (Barney 2014).

2.3 The VRIO Framework

According to the RBT theoretical framework underpinned by the VRIO framework, any firm that controls strategic resources which satisfies all the VRIO variables (including; value, rare, inimitability and used by organization) has potential to gain above normal performance of its competitors and to sustain its competitive advantage over a long term. A firm with no valuable resources will perform below normal and exhibit competitive disadvantage. A typical example of non-valuable resources in an organization could be bad/poor management (Barney 2001).

Resources Competitive implication  

Performance

Value Rareness Inimitability Organization Use
No No Competitive disadvantage Below normal
Yes No Limited Competitive

parity

Normal
Yes Yes No Partially Temporary Competitive advantage  

Above normal

Yes Yes Yes Yes Sustainable Competitive advantage  

Above normal

Table 1: The VRIO framework as illustrated by Barney (2001)

The VRIO Framework by Barney (2001) is a concept that emphasizes on resources own by a firm and its sustainable competitive advantage through the appraisal of the relationship between the internal characteristics of the firm and its performance. The resources own by a firm comprises of all its assets including: capabilities, organizational processes, firm attributes, information and knowledge in a firm’s possession that generates enhanced efficiency etc. However, a firm must possess all the four attributes of VRIO framework in order to transform its resources into sustainable competitive advantage. Hence, in the proposed research, the VRIO framework will serve as useful strategic analysis tool that can be employed to relate the characteristics of the resources own by the surviving Construction SMEs with their affirmed strategies and acknowledged competitive advantage(s).

2.4 RBT Based Conceptual Framework for the Proposed Research

In this research, the conceptual framework shown in Figure 1 below will be utilized as the lens to direct the collection of data through interview of owners of a selected group of surviving construction SMEs operating in the London region of the UK and through a review of relevant company documents. The semi structured interview questions and review of the company documents will be structured to reflect the; resources own by the organization, what capabilities/competencies the organization has/ have developed due to the possession of certain resources, the features and qualities that the organization considers has its competitive advantage (s), what the construction business success factors are and how the organization has been able to formulate strategies based on the success factors and based on its resources.

Figure 1: Resource Based Theory Underpinned Conceptual Framework for the Proposed Research

2.5 SMEs in the UK and their Five years Survival

According to the latest UK business demography statistics updates, SMEs represent an integral component of the UK economy (Chris 2019; ONS 2019; BEIS 2019). In 2019, there were an estimated total of 5.9 million SMEs in the UK private sector business (ONS 2019, BEIS 2019). This estimate constituted 99.9% of the total business population in the UK. Nonetheless, the challenges of business death and struggle for survival still exists predominantly. The ONS and BEIS in 2018 and 2019 released results that uncovered that a great deal of SMEs in the UK collapse before turning to five 5 years of consistent activity.

Five-year survival rate is often used to report the survival rate of SMEs in the UK. The ONS reports the survival rate of businesses in the UK after 5 years. In 2018 the survival rate of SMEs established or enrolled in 2012 and still active in 2017 was reported as 43.2%. In 2019, the survival rate was reported as 42.4% for businesses that were established or enrolled in 2013 and still actively operating in 2018. Therefore, these revealed survival rate statistics demonstrate that over half of SMEs in the UK have crumpled and stopped dynamic activity and turnover in the two referenced periods. Business mortality is undesirable on the grounds that no business is set up to fall flat. In light of the standards of entrepreneurship, SMEs are essential to a developing economy.

2.6 Construction SMEs in the UK and their Five-Year Survival Rate

The construction sector is one of the most significant contributors to the economic growth in UK. It accounts for 117 billion (6%) of the collective economic output. It is also liable for 2.4 million job positions of the total workforce in UK. BEIS (2018) established that this sector had the largest share of SME in 2018 and still held up a similar situation in 2019 by housing 18% of all UK SMEs in contrast with other SMEs such as: Wholesale and Retail Trade; Repair of Motor Vehicles and Motorcycles which house just 9%. BEIS (2019), reveals that (SMEs) with operations in construction are fundamental in the overall operation of construction industry activities.

The construction SMEs accounts for 5th of all the total SMEs in the UK at the start of 2019. This indicates an estimated over 1 million SMEs operating in Construction out of a total of 5.9 million SMEs in existence in the UK. Small and medium enterprises (SMEs) operating in construction are essential in the overall operation of construction industry activities. SMEs occupies the most significant portion of UK construction companies, accounting for at 99.5% of all private sector construction business (ONS 2019; BIS 2013).

Unfortunately, the survival rate of construction SMEs has remained relatively low and consequently, the mortality rate has remained high. Based on ONS statistics, the five-year survival rate of construction SMEs registered in 2013 and still active in 2018 is 43.5% indicating about 56.5% mortality rate (ONS 2019). Similarly, only 42.9% of construction SMEs registered in 2012 were still active in 2017 which means about 57.1% had collapsed. Breaking it down to specific categories of SME operation in construction, out of the 7,150 number of construction enterprise (operating in the construction of buildings) established in the year 2012 only 2,440 numbers (i.e., 34.1%) were still active in the year 2017, which means that about 65.9% died within five years of operation.

2.7 Factor Causing Failure of SMEs

There is some inconsistency in the literature with respect to what elements lead to the failure of small (Ive & Murray 2013). Alshawi & Arif  (2012), characterized a business failure as the closure resulting from the lack of profitability and lack of capacity to meet business costs. Besides, there is contradictory information on what accounts to the failure of a small business. It is important to comprehend the meanings of failure to gain a thorough perspective on the reasons for failure of small businesses (Rostami et.al. 2015). SMEs enterprises close for reasons like retirement, alternatives to seek after different chances, bankruptcy, or to trade out their investments (Benedettini, Neely, and Swink 2015; Leroy et al. 2015; Revilla et al. 2016). Earlier researchers compared business closure to entrepreneurial or business affiliation failure (Rostami 2016). Rostami (2016), further characterized exits, for example, retirement, seeking after different chances, and harvesting individual investments as beneficial closures. Exits because of poor fiscal performance are considered as business failure (Rostami et.al. 2015).

At least half of the SMEs fail within the first year (BLS 2015). However, a consensus lacks as to why some small businesses survive and remain successful while others do not (Ive & Murray, 2013). According to Lou, Lee, & Mathison (2012) and Lam, Mahdjoubi & Mason (2017), SMEs fail because of the lack of data on consumer purchase behaviors, lack of adequate working capital or poor management. SMEs ought to recognize how to read the indicators of business failure to expand their chances of survival (Holt 2013; Glass & Achour 2012). Pointing out the factors that lead to failure will equip the SMEs and their owners with strategies to adjust their focus and attention on making the necessary improvements. Lou, Lee, & Mathison (2012), contends that lack of consumer service, poor management of financial risks and poor quality of services and items are the indicators of SMEs failure. As per Williams (2014), there is a greater profitability for companies that have a wider access to finance. Also, the recognition and understanding of the needs of consumers is a critical component in preventing business failure.

The danger and chances of business failure rise inside the first 5 years of activity for SMEs and managers with no abundant knowledge (Build UK 2018). Alshawi & Arif  (2012), proposes that SMEs and managers prevent failure by reflecting upon the mistakes of others. New and struggling SMEs must borrow knowledge and mentorship from successful SMEs (Glass & Achour 2012; Williams 2014). One approach to maintain a strategic distance from business failure is to make a move to distinguish potential operational traps and plan corrective action to minimize risk (Construction Industry Council 2018).

3.0 Research Methodology

Lewis and Thornhill (2012), define research as the undertakings of people in discovering new things in a systematic manner so as to increase their knowledge on a particular subject. Applying an appropriate research method and design is imperative to the provision of an understanding of the research problem in the study. Different kinds of research methods exist and are accompanied by a multitude of different research designs. However, each of them provides a diverse point of view in understanding the research problem. According to Bryman and Bell (2015), there are two different research directions that researchers conduct so as to answer the aims and objectives of the study. First, there is quantitative research involves the numerical data and second, there is qualitative data that involves the non-numerical data which can be in form of images, clips, or words, just to mention a few.

Yilmaz (2013), contends that a qualitative research is the most suitable method in academic research because of its emphasis on quality rather than quantity. In particular, it is useful for research carried out to explore and explain the meaning that individuals or groups of participants attribute to a certain phenomenon. A qualitative approach was selected for this pilot so as to gain a thorough understanding of the human experience through the exploration of the experience of the owners of construction SMEs in sustaining their businesses for the first five years of operation. At this point, the author will now outline the aims, objectives, and the methodology used for this pilot study.

3.1 Research Aim and Objectives

This pilot study is utilizing data gathered from construction SMEs in London. In this context, the research will involve the collection of primary data from the interview with owners of construction SMEs, analysis of collected data, discussion of result and formulation of the conceptual model. The construction sector in the UK had the largest share of SME in 2018 (BEIS 2018), and still maintain the same position by housing 18% of all UK SMEs in 2019 compare with the likes of; Wholesale and Retail Trade sector; Repair of Motor Vehicles and Motorcycles which accounted for mere 9%. Out of the 7,150 number of construction enterprise (operating in the construction of buildings) established in the year 2012 only 2,440 numbers (i.e., 34.1%) were still active in the year 2017, which means that about 65.9% died within five years of operation.

The author will conduct a qualitative pilot study to investigate highlight the relevant factors that determine business sustainability in the London region of the UK. It may also provide the basis for future research on sustainable business strategies in different regions of the UK individually or in comparison. This study will explore and analyze the strategies used by surviving construction SMEs (who have survived beyond five years) with the intent to use the findings to develop an evidence-based business strategy model that owners of upcoming and struggling SMEs in the construction sector can adopt to sustain their business operations. The collected data will facilitate the achievement of the research aim. The aim and objectives of the main thesis are provided below:

3.1.1 Research aim (thesis): To explore the strategies used by construction SME owners in London to sustain their businesses beyond five years of operation.

3.1.2 Research Objectives (thesis):

  1. To critically examine the; vision, objectives, performances, competitiveness, and business strategies employed by owners of selected construction SMEs that have survived past 5 years.
  2. To explore and categorize the main characteristics of business strategies of the selected surviving construction SMEs operating in London.
  3. To demonstrate the relationship that may exist between and among the business

strategies, the resources owned by the selected construction SMEs and their competitive advantages.

  1. To utilize the findings from data analysis and its interpretation to develop an evidence-based

business strategy model for sustaining SMEs in the construction industry beyond five years of

operation.

The pilot study’s aim is as follows:

3.1.3 Research aim (pilot study): To examine the feasibility and validity of the selected scholarly frameworks intended to be utilized to a large extent in the author’s study field as outlined above.

Drawing from previous research in the areas of SMEs, construction industry in the UK, business survival tactics, strategic resource models, hypothesis are generated with regard to the best strategies for sustaining small and medium enterprises beyond 5 years. Testing of these hypothesized outcomes will then be carried out in a business setting involving construction company owners of SMEs that have survived beyond 5 years.

3.2 Methods

According to Saunders et.al. (2016), a research methodology is a theory of the manner in which a research ought to be undertaken. These are the strategies, processes and techniques involved in the gathering of evidence or data about a phenomenon so that it can be understood better after uncovering new information about it. Under this section of the pilot study, a discussion on the research philosophies that will be used for the study as well as the assumptions that accompany them will be outlined. The research design will be illustrated and then followed by a framework including sample description. Data collection methods used for the research will then be outlined. The data analysis, presentation of findings, reliability, validity and limitations will then be explored followed by the moral considerations. Finally, a project plan that includes timescales and noteworthy dates will be given to ensure that the study will be finished inside the assigned timescales.

3.2.1 Research Philosophy

Wilson (2014) observes that a research philosophy is the principle that guides the approach for gathering, analyzing and using data about a phenomenon under study. The importance of research philosophy cannot be downplayed as it provides the basis of approach employed in a research. A philosophy focuses on the different views on how the world works whereas a paradigm focuses on different ways of viewing the world. A qualitative paradigm proposes that the world is majorly subjective and prone to numerous interpretations and that numerical measurement will not always offer a satisfactory interpretation of the phenomenon, but words have the likelihood to produce more precise nuances. Contrary, the quantitative paradigm views the world as normally objective and that there exists a single truth or a limited number of universal truths which are measurable numerically.

Under the ontology concept, there exists the qualitative paradigm response (which believes there is only several subjective truths but no such things as objective truth) (Guba & Lincoln 2005). and the quantitative paradigm response (which believes there is objective truth or universal truth) (McKerchar 2008). The school of thought which agrees with the quantitative paradigm response are regarded as positivist while the school of thought that agrees with qualitative paradigm response are referred to as constructivist or interpretivist. The positivists believe that there are universal truths that are awaiting discovery, while the constructivists or interpretivists believes that reality is subjective and hence there is no reality except those reality created in individuals head or constructed by each individual. The research approach of researchers whose research aligns with the constructivists or interpretivists school of thought is usually referred to as phenomenology.

The way a researcher or an individual perceive reality influences their approach to knowledge acquisition and the procedure they follow in acquiring such knowledge (Long 2007). Under epistemology, the positivist usually carries out objective research to discover the truth. Objective research is a research in which researcher does not interact with what is being researched (McKercher 2008). The constructivists or interpretivist often carry of subjective research in which the researcher interacts with those being studied, with the intent to uncover their attitudes and behavior in relation to the research subject being studied (Greener 2008)).

Qualitative research in this pilot study will focus on human action and understanding, as such interpretation is a key part of the analysis involved of qualitative data. Therefore, the proposed research will align with the interpretivist qualitative research paradigm with relates to the subjective epistemological stance and the relativist ontology stance. The proposed research is focused on exploring the strategies used by owners of surviving Construction SMEs in operating their business beyond 5 years of registration, indicating that there will be need to interact with the owners of selected SMEs in other to find out the strategies they employed. Similarly, the major data that will be obtained through interviewing the SMEs owners. Their opinions and perception will then be interpreted so as to construct meaning that can be reported to contribute to the body of knowledge.

3.2.2 Research Design

As observed by Bryman & Bell (2015), that a research design provides a data collection and analysis structure. Bryman and Bell (2015), further contend that quantitative and qualitative research designs are the two significant research areas that are followed in literature studies. Quantitative data is concerned with information in the form of words, clips or images and is important when reviewing behavior patterns while qualitative data is generally associated with numerical data and statistics. This research proposes to use a qualitative research method and a multiple case study research design to achieve the intended aim and objectives of this research study. The research design process is huge and more detailed than the role it is appointed in customary product development and necessitates design thinking which, when integrated with entrepreneurial strategies and business change includes the representation of ideas and the real delivery of new items and services.

Thus, qualitative exploratory multi case study methods will be employed to achieve the aim of the proposed research, since it is focused on exploring the strategies employed by owners of construction SMEs operating in London to sustain their businesses beyond five years. A case study approach includes an investigation into a real-life business, company or organizational situation. Saunders et.al. (2007) characterizes a case study as a contextual analysis that involves reviewing of a multitude of information resources that have plenty of contexts. According to Kovalainen (2016), they are an effective method of producing comprehensive and logical information. A case study is a thorough and detailed exploration of a particular case (Lewis and Thornhill 2014) and was chosen for this pilot study research as it involves an analysis of SMEs within the construction industry in UK.

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