Strategic Management Practices and Performance of Jumia Kenya

Abstract

For an organization to succeed, it develops strategies, either emergent or inherent, to counteract pressures and changes, and to capitalize on opportunities in its environment. Strategic management practices (SMPs) are adopted in an organization to enable it to attain its performance objectives and a sustainable edge over rivals. Though Jumia Kenya had been in operation since 2012, by 2021, it had not posted any profits. This necessitated an investigation of the company's SMPs and how they associate to its organizational performance. The objective of this study was to determine the influence of strategic management practices on the organization performance of Jumia Kenya. The study was anchored on the resource-based theory and dynamic capabilities theory. This study applied a case study design. The study collected primary data through interviews with four senior managers at Jumia Kenya. The study used content analysis to analyze the qualitative data collected from the four interviews. The study also established that Jumia Kenya assesses its organization performance using the BSC. Further, the study findings showed that Jumia Kenya had effectively attained its performance in the customer perspective, learning and growth perspective and the internal processes perspective, but has underperformed in the financial perspective due to its focus on growth. The study further established that the SMPs adopted by Jumia Kenya which are strategic governance, strategy monitoring and review, strategic communication, talent management and quality assurance had positively influenced its organization performance. Based on the findings of the study, the study makes the following recommendations. First, the board of directors should recruit senior managers with strategic leadership competencies. Besides, Jumia Kenya and other firms in the ecommerce sector should have manager development initiatives to enhance strategic leadership competencies such as strategic thinking, strategy execution, strategic agility, and strategic communication. Moreover, the study recommends to organization’s senior management and board of directors to ensure that they have a formal strategic communications plan to enable effective communication about the firm’s strategy to all its key stakeholders. The study also recommends to board of governors in firms to play their rightful role in strategic governance. Besides, the study recommends the firm not to over-emphasize on long-term growth to the detriment of financial profitability. Lastly, the study recommends to senior management in Jumia Kenya, other e-commerce firms and all firms in general, to ensure that they have quality assurance mechanisms engrained in their strategic plans to ascertain that the envisaged quality standards are met or surpassed.