The Process of Strategy Formulation in Non Deposit Taking Microfinance Institutions in Nairobi, Kenya

Abstract

In a competitive business environment, corporate firms require strategic thinking and only by formulating and implementing good corporate strategies can they become strategically competitive. A sustainable competitive advantage occurs when a firm evolves and implements a value – creating strategy of which other firms are unable to replicate the benefits or find it too costly to initiate. Corporate strategy includes the commitments, decisions and actions required for a firm to achieve strategic competitiveness and earn above average returns. This study employed a descriptive survey. The study population comprised of 34 non-deposit taking microfinance institutions operating in Nairobi, Kenya. The census method was employed since the number was small. Data was collected through interviewer-administered questionnaire that targeted mid-level to senior management positions as informants. The researcher used statistical package for social sciences (SPSS) to analyze the data. The study found out that half of the respondents indicated that the competition facing the organization was fairly high. In addition, the study also found out that majority of the respondents strongly disagree that organizations identify key success factors hence focus their resources and efforts on these factors which subsequently enhance their chances of survival. The study concludes that the competition facing the organizations was fairly high and that organizations do not identify key success factors hence unable to focus their resources and efforts on these factors which subsequently enhance their chances of survival. The study also recommends that the organization should mobilize sufficient resources since resources constraints jeopardized strategy formulation. Moreover, the study recommends that MFIs should devise a retention strategy which protects its human resources.