Growth Strategies Used by Top 100 Smes in Business Environment in Kenya

Abstract

The Small and Medium Enterprises (SMEs) in Kenya business environment have been essential to economic growth. They have employed the majority of the working population and also grown to be large companies in certain sectors. The growth strategies used by them thus are important to be known as these may then be used to aid the other small businesses in their growth. The study sought to determine strategies used by Top 100 SMEs in the business environment in Kenya. The study utilized a descriptive research design to test the hypothesis of the relationship that existed between growth strategies and level of growth achieved. The population for this study involved 100 SMEs as ranked in 2013 and data was from the firms. Data analysis incorporated descriptive statistics and inferential statistics (regression analysis). It was found that SMEs grew between 5 and 20% per annum. The most widely used strategies were diversification and market development. The relationship between the growth of companies and the strategy used was not established and thus the strategy used doses not necessarily bring growth of a certain degree. The study also found out the SMEs changed the growth strategy to mainly enhance survival. The study recommends that SMEs should assess the appropriate growth strategy after looking at their environment to grow. This will allow them to grow within the business environment according to their current challenges and the opportunities which are available to them. The major limitation for this study was that the SMEs growth strategies that were identified were within a small sample and thus may not represent the entire SME sector. The study further recommends that future researchers should conduct research on corporate governance structure and impact of growth strategies on financial performance. This research also recommends researchers to establish whether the structure affects the growth strategies and help in funding of the SME by financial institutions based on them.