Strategy of SMEs' Transformation and Upgrading Based on Niche Theory

Similar to creatures, businesses always survive and develop in certain economic, social and political environments, and need to advance with the times according to changes in external environment. With the changes in the situation of domestic and international economic development and the increasing market competition vehemence, transformation and upgrading has become an inevitable choice for the development of SMEs. Based on summarizing the previous SME evolution theory and the enterprise niche theory study, with ecology position theory as the starting point and the characteristics and influencing factors of SMEs transformation and upgrading, this paper establishes a factor model of the niche situation for SMEs transformation and upgrading. 'State' is the SMEs' current state, which is the outcome of its historical accumulation, while 'Potential' refers to the development potential of SMEs, being the real influence on the environment, which determines the future direction of SMEs. Through in-depth analysis of the 'State' and 'Potential' elements of the niche and the discussion of SMEs' relevant strategies within the process of transformation and upgrading development for each sub-element, this paper provides a reference for the transformation and upgrading of SMEs' practice.