A survey of strategies employed by micro-enterprises: the case of micro-enterprises located along Ngong road Nairobi
Okanda, Everlyne O
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Strategies are ubiquitous and can be found at the highest levels of corporate, governmental, military and organisational endeavour and in small, medium and large units. All types of enterprises need business strategies to give direction and purpose, to deploy resources in the most effective manner, and to coordinate the stream of decisions being made by different members of the organisation. Strategies are essential for any enterprise's survival. Without a strategy an enterprise will be like a ship without a radar, it will have no direction at all. Micro-enterprises operate in highly competitive market niches in which large enterprises are also deployed. They provide goods and services targeted towards local demand. The markets in which they operate are overcrowded and majority of the players compete to produce and sell very similar products or services. This leads to steep price competition resulting in low level of sales and low profit margins. Despite, this gloomy circumstances, the number of operators are increasing rather than decreasing. This indicates that they have strategies in place which enable them to survive. The study set out to establish the specific strategies they employ. The study focused on the strategies employed by micro-enterprises. It looked at the general characteristics of the micro-enterprises, the problems they encountered and how they went about solving them. The findings were used to deduce the strategies the micro-enterprises employed in order to survive. The survey design was used to collect data from the micro-enterprises operating along Ngong Road. The two m1tin reasons for using the survey method was due to the population size which was relatively small and also the need to make comparisons at the same point in time across a wide selection of people. Various strategies were identified, such as diversification, differentiation, pricing as a strategy among others. Surprisingly enough despite the low levels of education these micro-enterprise owners have come up with very creative methods of carrying out business which in reality bear some semblance to the strategies that are used in the corporate world. In the ensuing sections, the strategies employed are discussed in detail. Finally, the findings of the study clearly illustrated that micro-enterprises operate in a very challenging environment and to survive they need to have strategies. This further confirms that indeed strategy is everywhere, from large enterprises to the smallest enterprise. However, it would be important if the policy makers would come up with policies that ensure these micro-enterprises operate in legitimate settings without interference from the council. This would enable the micro-enterprises pursue more growth and profitability strategies rather than focus mainly on survival strategies. In the future, it would be interesting if research would be carried out on the reality of strategic groupings where the emphasis would be to establish whether microenterprises such as kiosks and large enterprises such as supermarkets exist to serve people of different income levels.
CitationA Management Research Project Report Submitted in Partial Fulfillment for the Requirements of the Degree of Masters of Business Administration (MBA), School Of Business, University Of Nairobi