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Can a Gazelle Run Forever?: A Study of Rapid Growth’s Affect on SME’s Ability to Grow in a Long-Term Perspective

Gazelles are high growth Small Medium sized Enterprises (SMEs) that constantly are creating new job-opportunities and contributing positively to the Swedish economy. In order to achieve competitive advantage and growth for SMEs, several authors argue that a focus on differentiation is most suitable, which is a strategic approach mainly underpinned by innovative ability.

However, when competitive advantage leads to rapid growth certain growing pains occur. Thus, when SMEs are growing rapidly, what happens to their innovative ability and further how does this affect their long-term growth?

The purpose of this study is to explore how rapid growth in SMEs affects their ability to attain long-term growth.

In order to fulfil the purpose, a comparison analysis has been conducted based on a holistic multi-case study. The cases included five manufacturing SMEs in Jönköping County, of which all have been appointed the Gazelle-award issued by the Swedish financial newspaper Dagens Industri. This award is given to companies that have doubled its turnover in three years, while simultaneously having positive growth and a stable economical situation.

After analysing the empirical results with appropriate theories, some main conclusions could be reached. The study could demonstrate that the growing pains, often emerging in SMEs experiencing rapid growth, influence the organization to adapt itself to the increasing complexity and resource constraints in a way that has a negative affect on the their innovative ability. There was further some support that this in turn had a negative affect on SMEs ability to grow in a long-term per-spective.
Source: Jönköping University
Author: Bergström, Gustaf | Bäckbro, Johan | Johansson, Christofer

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