Strategies of the Development of Entrepreneurship and SME

economy. The so called in the organizational sciences “absorptive capacity” or the close term“organizational capacity for change” would result in the willingness to coop on a country level.With the still highly autocratic and centralized structure of Russian economy Ukraine andMoldova have better chances to use the globalization factor.PORTER’S DIAMOND MODELFor the purposes of environmental analysis and making recommendations for company’sstrategy consultants usually use several models including Porter’s Diamond approach (Porter,1990), which is enlightening the institutional role in the company’s success. It gives anopportunity to figure out what is the key force/forces in the company’s development. There aresome significant limitations to the model that we need to describe.The limitations are: 1) themodel is developed for the analysis of the industry but not an entire SME sector analysis; 2)the model does not take in account the dynamics (history) of the rivalry, and 3) institutionsalso ignored by the model (Davis & Ellis, 2001).We would change the model, including institutions and global demand conditions in it(Figure 1). For the current need of the SME sector analysis for three transitioning countries thathave been parts of the same environment of the socialist country in a recent past we would notfocus on history of rivalry since they had it similar at least for long enough in the past. Inaddition to the model adjusted to the need of our analysis some cultural characteristics areresponsible for differences in the countries’ situation. We mentioned that already in the firstsection while describing socio-cultural characteristics influencing the SME sector developmentsin each of the countries.Porter’s model itself represents the four factors that are influencing the targetedindustry in the targeted country. We would be dealing with SME sector, not just an industrysince all small businesses in each of three countries have comparable characteristics, and all ofthem are underdeveloped. The company’s competitive advantage is a combination of itsresources and capabilities.SME strategy,structure andrivalryCountry factorendowmentsDomesticdemandconditionsCountryinstitutionalframeworkGlobal demandconditionsRelated andsupportingindustriesFigure 1. Adjusted model of National Competitive advantage (for the Black Sea Region) forSME sector analysis70