The Influence of External Environment on Strategy in Harambee Cooperative Savings and Credit Society

Abstract

The environment in which organizations operate changes constantly. Organizations are expected to deal with competitive forces such as threats of new entrants, substitute products, bargaining power of suppliers and bargaining power of customers in order to be competitive. In Kenya, SACCOs function in competitive environment since liberalization of the economy in 1997. Harambee SACCO was chosen as a case study. Objective of the research finding were: To find out strategies pursued by Harambee Cooperative Savings and Credit Society due to environmental changes. To establish the influence of external environment on the selection of these strategies. Research was modelled on the case study technique that aimed at establishing the influence of external environment on strategy on Harambee SACCO. In this study primary and secondary data collection methods were applied to gather data. Semi-structured questionnaires were used to gather primary data which had open ended questions which were administered through drop and pick method to top management team. Data from the study was analysed using content analysis since it was qualitative statistic. Analysis of content was used to allow qualitative statistic collected to be examined based on interpretation and meaning of information from respondents. The study concluded that performance of the Sacco is mostly affected by the external environment. For a Sacco to make important strategic decisions, it has to consider changes in external environment in which the firm operates in since there are opportunities or threats involved. As a proper way of gaining competitive advantage in the economy, the SACCO needs to incorporate use of competitive strategies. SACCO also possesses competitive advantage over other SACCOs given its nationwide membership. Performance and competitiveness of SACCO is mostly influenced by the level of competition within a particular economy. A SACCO incurs more expenses to maintain quality service and attract more customers as a cost strategy. To differentiate its services the SACCO uses publicity and offers a wide range of services. High skilled staffs are also engaged in the service provision. The focus strategy on a specific market is used as a means to remain competitive. To a moderate extent the firm out-sources support staff. From research findings, research concludes that; for improvement of competition within the SACCO, majority of the focus should be geared towards total quality management system. By doing this it will help ensure that consumer wants are carried out in suitable way of monitoring value hence further address wants and needs of most customers by continuously addressing them well. For a more and improved fulfilment of client needs to particular regions, SACCO needs to focus on analyzing specific technical problems which exist in each particular area. Apart from financial sector for instance stock market and real estate, SACCO also needs to venture into other savings which will help boost the economic standing and its asset base. This particular research finding didn’t attain 100% rate response so result of the topic under investigation can only be additional interpreted and understood inside margins of inherent limitations because the organizations control policies and disinclination of respondents to give back their response.