Strategic Responses to Environmental Challenges Facing Asili Sacco Limited

Abstract

Organizations cannot be oblivious of the environment within which they operate. They have to be conscious to changes in the environment and respond to such changes in order to remain relevant. Organizations are faced with turbulence and stiff competition in their external environment. The Sacco sector in Kenya today is characterized by an ever changing operating environment characterized by stiff rivalry among the major players as each seeks to establish itself in the market. As a result of the triggers for strategic responses, the Asili Sacco has had to develop strategic responses to enable it to remain competitive in the market, in the face of evolving conditions. The purpose of the study was to determine the strategic responses adopted by Asili Sacco to address the external environmental challenges. This research was conducted through a case study. The researcher used both primary and secondary data. Primary data was collected using self-administered interview guides while secondary data was collected by use of desk search techniques from published reports and other documents. The data collected which is qualitative in nature, was analyzed using conceptual content analysis. From the study findings, the study concludes that the challenges in the external environment that affect the operations of the Sacco include unclear regulation by the government and stiff competition from financial institutions/ commercial banks and other Saccos. The study further concludes that the Sacco has adopted restructuring strategies in terms of retrenchment, products and management; diversification strategies to increase profitability through greater sales volume obtained from new products and new markets; differentiation strategies and monitoring and evaluation strategic responses. The study recommends that Asili Sacco should engage in more cost reduction as a response to its competitors’ strategies whose products and services are much cheaper. The study further recommends that the Sacco should diversify global markets for its products, establish a closer working relationship with banking institutions and ensure computerization of all its essential services