Strategic management practices in small and medium enterprises at Kariobangi light industries, Nairobi

Abstract

Strategic Management is a relatively new concept in management. Its relevance has gained currency with increased competition among industry players where firms aim at gaining competitive advantage over rivals in order to remain viable over the long-term. There is however no uniformly agreed approach to strategic management amongst different firms. Each organization should develop and implement its own management concepts bearing in mind its unique situation to be able to handle its strategic decisions. This study sought to determine the strategic management practices as applied by SMEs at Kariobangi Light Industries and also sought to determine the factors that influenced the choice of strategies applied by these firms. The study relied entirely on primary data which was collected through structured questionnaires with both closed and open-ended questions and personal interviews which enabled the researcher to freely interact with respondents and gain their confidence. This was necessary to remove any suspicions that the respondents might have had given the stiff competition in the area surveyed. Data was then coded and analyzed on excel sheets and presented on tables to determine frequencies and percentages. Although most of the firms surveyed did not have any formal strategic management mechanisms, they practiced strategic management in their day to day running including investment in right personnel and skills, use of appropriate technology, focus strategy, reaction to competitor actions, maintaining good terms with creditors and suppliers and ensuring customer loyalty. In settling on the strategies, most firms considered such factors such as availability of resources, need to block new entrants, customer needs, availability of substitutes and social, political and environmental factors. Successful implementation of strategies requires investment in resources. Firms should diversify their sources of resources through such means as forming partnerships and credit unions. They should also organize themselves into a powerful group to lobby for favorable considerations during formulation of policies and legislations.