Strategic responses of SACCOs to changing operating environment: a study of Nairobi Province KUSCO affiliated SACCOs.
Abstract
Economic and political reforms are sweeping the whole world affecting Europe, Africa,
America East Africa, and Kenya. Such reforms have created a fundamental change in the
environment in which firms operate. An obvious manifestation of such changes is the
liberalization of trade. Such liberalization has meant that SACCOs in Nairobi have to
contend with unbearable competitive pressures from the resilient global companies. The
study set out to document the strategic responses adopted by Savings and Credit Cooperatives
(SACCOS) to environmental turbulence.
The objectives of the study were;
To determine the changes that have occurred in the SACCO sub-sector with the
onset of the liberalization.
To determine what adjustments In products, process, promotion, distribution,
costs structures, market research, staff development and market predisposition
the SACCOs have adopted.
Primary data was collected using open and closed-ended questionnaires distributed to
senior managers in the selected SACCOs.
The data was thereafter, analysed using descriptive statistics and an appropriate computer
package. The analysis revealed that SACCOs have made various changes in their
traditional, resource mobilization and-..lending methods in an attempt to cope with the
changed operating environment. The SACCOs have also changed the basic products by
adding new features such as front office services (P.oSA) among others.
SACCOs require fresh and initiatives to penetrate new market niches. The SACCOs
philosophies should be more specific and directed towards enhancing excellence in
customer service.
The marketing practice need to be more aggressive to counter competition paused by
cheap bank loans and substitute micro finance funds.
The strategic variables have also been adjusted either moderately or.significantly. The
most adjusted strategies are those of product and promotion. The products range have
been improved in delivery, features and variety. In market research the SACCO need to
significantly increase information gathering on competitors and customer needs. Efforts
should be directed towards satisfying the identified customer needs.
In cost structure strategies, the study revealed the need to adapt significant improvement
in technology and capital investment in information technology. The other strategies
such as pricing and distribution have been moderately adjusted ..
By undertaking various strategic responses, SACCOs are able to not only defend their
market share but also to increase profitability and efficiency. The success of SACCOs in
Nairobi is a learning experience for other local SACCOs in the country facing or about to
face the effects of changed competitive conditions.
Citation
MBASponsorhip
University of NairobiPublisher
University of Nairobi School of Business, College of Humanities and Social Sciences