Strategy Development in Small and Medium Enterprises in Mombasa County

Abstract

This research study was conducted to investigate strategy development in small and medium enterprises in Mombasa County The issue of strategy development in business is keenly gaining roots in Kenya. Long felt as a means employed by large multi nationals and private firms, the small business operator has realized that in order for him to succeed, then he has to engage in strategy development. SMEs play a vital role in development of the Kenyan economy. However, despite the fact that businesses realise the need for strategies, very few have their plans spelt out to the rest of the employees, leaving them etched in the owner-managers minds. Building on sparse literature regarding the use of strategy development in small and medium enterprises within Mombasa County, the researcher sought to find out whether indeed strategies are developed, and if they are, what factors influence their development. The study used random sampling technique. The analysis involved a sample of 550 (100 percent) respondents that was involved in the process of data collection. The response rate was 490 (89.09%) respondents who filled and returned the questionnaire. The data was obtained using self administered questionnaires and analyzed using Statistical Package for Social Sciences. Descriptive statistics was used to analyze data using mean, frequencies, standard deviation, percentage and ANOVA test and the findings presented using tables. The research findings show that a large number of the firms had an annual turn over of over Kshs. Two Million, with one hundred percent (100%) of the firms being in operation for over one year, three quarters of the firms having implemented a vision, mission and a goal. Half the number of the firms had a strategic plan, formally developed and largely influenced by the owners. Most firms used Government regulations in the process of strategy development. The analysis on influence on strategy development showed that business continuity, and adapting to the environment had the greatest influence with half the number of firms with no follow-up on strategy after implementation. However firms following up strategy implementation did it at a moderate extent. The analysis also showed that three quarters of the firms never reviewed their strategies after implementation while the quarter that reviewed its strategies did it on an indefinite frequency with half of the firms abandoning some strategies. Environment uncertainty had the greatest influence on non implementation of the developed strategies while disinterested employees were ranked lowest. Finally, regression analysis supports the causal relationship of years of operation and firms’ having a strategy. Strategy implementation had the greatest contribution of twenty three percent (23%).