Strategic Planning Practices By Mainstream Retail Supermarkets In Nairobi

Abstract

Changes in the business environment are leading to new and greater demands on strategic planning systems. Moreover, given that strategic planning‘s sole purpose is to improve strategic performance, improving, assessing and monitoring the strategic planning process would appear to be a key managerial task. However, many organizations do not perform the task. Johnson and Scholes (2006), view strategic planning as the direction and scope of an organization over the long-term, which achieves advantage for the organization through its configuration of resources within a changing environment, and fulfill stakeholders‘ expectations. The purpose of this study was to establish the strategic planning practices adopted by mainstream supermarkets in Kenya. Specifically the study sought to determine the strategic planning practices adopted by retail supermarkets in Nairobi and to establish the challenges to strategic planning faced by mainstream supermarkets in Nairobi. This research problem was solved through the use of a descriptive survey design. This enabled a comparison among the practices in the different supermarkets in and around the city. The target population of this study was all the mainstream supermarkets in Nairobi Central Business District and also those that were in the residential areas and surrounding suburbs. These were the supermarkets with 50 or more employees. According to economic abstract (2008), there were 23 mainstream supermarkets in Nairobi. These were the primary target of the study. The research employed a census method due to the small size of the population. All the 23 supermarkets in Nairobi were included as subjects in the survey. The study used both primary and secondary data. Primary data was collected using semi-structured questionnaires while secondary data was in form of secondary information contained in books, journals and other relevant secondary sources. Data analysis was based on descriptive statistics such as mean scores, percentages and standard deviations. The results from the analysis were then presented using tables, pie charts and bar graphs for easier interpretation. Findings from the study indicate that all the mainstream supermarkets had formal strategic planning processes in place. Most of the supermarkets applied a top-down planned approach. The mainstream supermarkets also adhered to strategic planning best practices such as top management in the supermarkets providing the necessary advice and grievance handling procedure during strategic planning process, top management giving support and being committed to strategic planning, having specific targets and critical issues around the planning process that are achievable and having action plans such as policies, procedures and rules that are well understood to help implementation programmes. However, the supermarkets failed in some best strategic planning practices such as failure to consult all relevant stakeholders in the strategic planning process and poor communication of the plan and in the implementation process. Considering the results from the study, it is recommended that mainstream supermarkets should adhere to the best practices such as having a visible and effective communication process spearheaded by an experienced person that ensures that information on strategic plans is timely communicated across the organization. Another improvement would be to embrace technology in the planning models which can enable many stakeholders to be included in the process. The supermarkets top management should ensure that top managers act as leaders in the planning process. Another recommendation is to the government. The government should therefore put in place policies and regulations that stimulate growth in the industry. These measures should be communicated to all the stakeholders in the industry which will reduce risk and uncertainty in the legal and policy framework. The government should also improve infrastructure (both transport and communication) to open up more markets which will not constrict supermarkets in the major towns only.