Strategic Management Practices And Performance Of Small Scale Enterprises In Kitui Town

ABSTRACT

This study was conducted on strategic management practices and performance of small scale business enterprises operating in Kitui town. The objective of the study was to establish the strategic management practices employed by small enterprises in Kitui town, and how investment in personnel and skills, reaction to competitor actions,maintaining customer loyalty and product differentiation influenced performance of enterprises. The research involved a survey of 99 small enterprises in Kitui town out of a population of 7,246. Data was collected using questionnaires. Frequency tables and percentages were used to present the findings. Responses in the questionnaires were tabulated, coded and processed by use of a computer Statistical Package for Social Science version 20 programme to analyse the data. Descriptive statistics like the mean and inferential statistics were used to derive meaningful findings and inferences. Results indicated that investment in personnel and skills was a key determinant strategic management practice influencing performance among small scale businesses.Results indicate that innovative products and services, levels of efficiency,ethicalstandards and new market entrants influenced performance to a great extent. The study findings reveal that majority of the respondents agreed with the statement that constant communications with clients, response to customer feedback, maintenance of standards of reliability, consistency of products and services and business reciprocity were important to a great extent in influencing performance. The study findings reveal that majority of the respondents agreed with the statement that uniqueness of products, product improvement and cost leadership were important to a great extent in influencing performance. Investment in personneland skills being a key determinant on performance of small enterprises has been supported by other scholars and hence highlighting the intensity of investing in personnel and skills to improve business performance. It is also possible to conclude that delegation of duties is also a crucial aspect that facilitates for excellent standards of motivation, reaction to competitor actions was found statistically significant in explaining business performance. It is also possible to conclude that the entry of new entities in any market increases the levels of competition and the identification of such entrants would be difficult if the enterprise does not have adequate platforms for strategic management. It is possible to conclude that communication acts as a pertinent element of customer loyalty, it also benefits the enterprise in terms of acquisition of feedbackand that quality enhances customer loyalty because it makes them feel confident about the enterprise. It is possible to conclude that product differentiation ensures that a small enterprise is relevant and successful even in a highly competitive environment. It is recommended that businesses owners should adopt strategic management facilitates for the relevant methods of motivating employees for their different tasks as this helps in terms of enhancing their loyalty towards the enterprise.It is recommended that businesses organizations should enhance communication as this will make the clients to feel as though they are integral role players in the enterprise; business should offer good quality products and services to customers and should always match the expectations of clients. It is recommended that businesses must develop new methods to overcome customer loyalty and retention challenges while identifying new customer purchasing and behaviour insights. It is recommended that businesses organizations need to continually differentiate their products to gain a competitive edge over their competitors. Further studiesare recommended in another town in order to test whether the conclusions of this study will hold true. They could also focus on the internal aspects of small business such as internal controls, which enhance the internal efficiency and may have positive spillover effects on customer loyalty, employee skills and competitive advantage.