Generic Strategies Adopted by Small and Medium Enterprises Within Industrial Area, Nairobi City County for Competitive Advantage

Abstract

In today's rapidly evolving business environment, only a few companies can guarantee survival and secure returns, leading to heightened competition across all sectors. Companies may gain an advantage over their rivals if they can successfully predict what consumers want and then provide it to them in a way that maximizes profits. Finding out how small and medium-sized businesses (SMEs) in Nairobi County's industrial sector use Porter's generic tactics to their advantage was the driving force behind this study. The two theories that formed the basis of this inquiry are the competence strategy-based theory and the resource-based perspective theory. The researchers in this study opted for a descriptive methodology. The intended recipients were SMEs based in the Industrial Area of Nairobi that were manufacturing goods and providing services. More specifically, the research mainly focused on 66 SMEs registered with the Kenya Manufacturing Association (KAM) in this region. A sampling procedure similar to that of a census survey was used to choose the sample population. Principal sources of information were used to conduct the study. Primary data was gathered via the use of questionnaires. The data was analyzed using descriptive and inferential statistics. The study's results show that SMEs' competitive advantage grows with each unit increase in differentiation, suggesting that differentiation strategies are beneficial for SMEs. The research also shown that a growth in cost leadership approach also contributes to an enhancement of competitive advantage due to the favorable influence that it has. A positive influence on competitive advantage was shown to be associated with the focus strategy, which means that an increase in the focus strategy by one unit results in an increase in the competitive advantage. In order to meet the requirements of a wide range of markets, the research suggests that small and medium-sized manufacturing businesses should develop one-of-a-kind products in a range of numbers. This approach will enable SMEs to expand and enhance their current markets by appealing to both high-volume, wealthy customers and those who purchase in smaller quantities. Additionally, the study0recommends that manufacturing0SMEs in0Nairobi County adopt cost0leadership strategies by integrating technology into their operations. This will enhance efficiency and reduce the need for excessive manpower.