Strategies Employed by Small and Medium Enterprises to Develop Competitive Advantage in Nairobi County

Abstract

For a business to survive in the market that has a lot of players, it has to adopt pure strategic management that will enable it to compete with other competitors in the market. Firms formulate strategies to pursue competitive advantages when they seek to improve or maintain their performance through independent actions in a specific market or industry. By using an effective competitive strategy, an organization finds its industry niche and learns about its customers. In Kenya, three out of five small businesses fail within the first few months of operation. Failure of the entrepreneurs to come up with effective strategies that can enhance SMEs performance is a major reason behind their failure and poor performance. This study sought to investigate strategies employed by small and medium enterprises to develop competitive advantage in Nairobi County. The study was guided by the following objectives, that is, to determine the nature of strategies employed by small and medium business enterprises to develop competitive advantage in Nairobi County and to establish the challenges faced when employing strategies by small and medium business enterprises in Nairobi County. This study employed descriptive cross-sectional survey design. The study targeted 400 manufacturing SMEs operating within Nairobi County. The study employed simple random sampling technique in coming up with the sample of 40 respondents. The study used questionnaires to collect primary data. The study generated both qualitative and quantitative data where quantitative data was coded and entered into Statistical Packages for Social Scientists (SPSS Version 17.0) and analyzed using descriptive statistics. Presentations were done in form of tables and figures where interpretations were done in prose. The study findings revealed that SMES have developed competitive advantage strategies while marketing strategies is one of the competitive advantage strategies adopted where relationship marketing and aggressive promotion are mostly adopted. The study recommends that SMEs should come-up with a way of rebranding or repacking products to give them the taste of the consumers by so doing they increase the customer base as well as catering the potential of consumer in buying quantity and quality of the commodity. The study also recommends that entrepreneurs‟ should relook on their competitive advantage strategies in terms of business branches and assets in order to reach the consumer to their door step while they increase customer base as well as creating awareness of the service or product they deal with. The main limitation of study was its inability to include more SMEs. The study could cover more SMEs in Nairobi that could have provided a more broad based analysis. The researcher also experienced other challenges such as non-cooperation from some owner managers and it was not easy to convince them to fill questionnaires hence not reaching the targeted sample size. The study suggests that further research to be done on the strategies employed by small and medium enterprises to develop competitive advantage within organization in order to give both negative and positive sides that can be reliable.