ABSTRACT
Small and Medium Enterprises (SMEs) is an important sub sector for the Kenyan economy
like many other developing countries since it employs about 85% of the Kenyan workforce
(about 7.5million Kenyans of the current total employment). The current constitutional
framework and the new Micro and Small Enterprise Act 2012 provide a new window of
opportunity through which the evolution of SMEs can be realized through the devolution
framework, however, the impact of devolution on SMEs development depends on the
architecture of the regulatory and institutional framework inclined to support SMEs in an
economy. Lack of access to credit is a major constraint inhibiting the growth of SMEs sector.
The issues and problems limiting SMEs acquisition of financial services include lack of
tangible security coupled with inappropriate legal and regulatory framework that does not
recognize innovative strategies for lending to SMEs. The study sought to establish the
influence of competitive strategies on the organizational performance of SMEs in Nairobi
City County, Kenya. The specific objectives were to determine the effect of low cost
leadership strategy, differentiation strategy, focus strategy and combination strategies on
performance of SMEs in Nairobi City county.The study was anchored on the following three
theories which include Porter’s generic strategies model, resource-based view theory, and
resource dependence theory. Empirical literature reviewed scholarly studies on the porter’s
generic competitive strategies which included cost leadership strategy, differentiation
strategy,focus strategyand combination strategies and their influence on financial
performance of SMEs. The study used a descriptive research design. The population of study
were youth owned SMEes in the 17 sub-counties in Nairobi City County that are operational.
This consisted of 1115 respondents who were the proprietors of the enterprises. A Census
was carried out for all the SMEs since the population was small. The primary data was
collected by use of self-administered semi-structured questionnaire. Data analysis was done
by use of descriptive statistics such as frequencies, percentages, mean scores and standard
deviation with the aid of SPSS and presented through tables, charts, graphs, frequencies and
percentages. The study realized that the Michael Porter’s generic strategies of competitive
advantage used in the study which include low cost leadership strategy, differentiation
strategy, focus strategy and combination strategy significantly influenced the organizational
performance of SMEs in Nairobi City County, Kenya. The variables explained 85.11% of
the changes in organizational performance of the SMEs. A unit increase in low cost
leadership strategy adoption by SMEs led to a 0.655 increase in organizational performance
of the SMEs, a unit increase in differentiation strategy adoption led to a 0.876 increase in
performance of the enterprises, a unit increase in focus strategy transformed to a 0.945
increase in performance of the firms while a unit increase in application of combination
strategy by the SMEs led to a 0.860 increment in their overall performance. The study
recommended improved capacity buidlign among the SMEs and participation of stakehodlers in the growth of the small enterprises.
ISABOKE, S (2021). Competitive Strategies And Performance Of Micro And Small Enterprises In Nairobi County, Kenya. Afribary. Retrieved from https://afribary.com/works/competitive-strategies-and-performance-of-micro-and-small-enterprises-in-nairobi-county-kenya
ISABOKE, SHEM "Competitive Strategies And Performance Of Micro And Small Enterprises In Nairobi County, Kenya" Afribary. Afribary, 27 May. 2021, https://afribary.com/works/competitive-strategies-and-performance-of-micro-and-small-enterprises-in-nairobi-county-kenya. Accessed 13 Oct. 2024.
ISABOKE, SHEM . "Competitive Strategies And Performance Of Micro And Small Enterprises In Nairobi County, Kenya". Afribary, Afribary, 27 May. 2021. Web. 13 Oct. 2024. < https://afribary.com/works/competitive-strategies-and-performance-of-micro-and-small-enterprises-in-nairobi-county-kenya >.
ISABOKE, SHEM . "Competitive Strategies And Performance Of Micro And Small Enterprises In Nairobi County, Kenya" Afribary (2021). Accessed October 13, 2024. https://afribary.com/works/competitive-strategies-and-performance-of-micro-and-small-enterprises-in-nairobi-county-kenya