Strategies Employed by Small and Medium Enterprises to Develop Competitive Advantage in Nairobi County
Abstract
For a business to survive in the market that has a lot of players, it has to adopt pure
strategic management that will enable it to compete with other competitors in the market.
Firms formulate strategies to pursue competitive advantages when they seek to improve
or maintain their performance through independent actions in a specific market or
industry. By using an effective competitive strategy, an organization finds its industry
niche and learns about its customers. In Kenya, three out of five small businesses fail
within the first few months of operation. Failure of the entrepreneurs to come up with
effective strategies that can enhance SMEs performance is a major reason behind their
failure and poor performance. This study sought to investigate strategies employed by
small and medium enterprises to develop competitive advantage in Nairobi County. The
study was guided by the following objectives, that is, to determine the nature of strategies
employed by small and medium business enterprises to develop competitive advantage in
Nairobi County and to establish the challenges faced when employing strategies by small
and medium business enterprises in Nairobi County. This study employed descriptive
cross-sectional survey design. The study targeted 400 manufacturing SMEs operating
within Nairobi County. The study employed simple random sampling technique in
coming up with the sample of 40 respondents. The study used questionnaires to collect
primary data. The study generated both qualitative and quantitative data where
quantitative data was coded and entered into Statistical Packages for Social Scientists
(SPSS Version 17.0) and analyzed using descriptive statistics. Presentations were done in
form of tables and figures where interpretations were done in prose. The study findings
revealed that SMES have developed competitive advantage strategies while marketing
strategies is one of the competitive advantage strategies adopted where relationship
marketing and aggressive promotion are mostly adopted. The study recommends that
SMEs should come-up with a way of rebranding or repacking products to give them the
taste of the consumers by so doing they increase the customer base as well as catering the
potential of consumer in buying quantity and quality of the commodity. The study also
recommends that entrepreneurs‟ should relook on their competitive advantage strategies
in terms of business branches and assets in order to reach the consumer to their door step
while they increase customer base as well as creating awareness of the service or product
they deal with. The main limitation of study was its inability to include more SMEs. The
study could cover more SMEs in Nairobi that could have provided a more broad based
analysis. The researcher also experienced other challenges such as non-cooperation from
some owner managers and it was not easy to convince them to fill questionnaires hence
not reaching the targeted sample size. The study suggests that further research to be done
on the strategies employed by small and medium enterprises to develop competitive
advantage within organization in order to give both negative and positive sides that can
be reliable.
Citation
Degree Of Master Of Business Administration,2014Publisher
University Of Nairobi