Strategic Responses Adopted by Micro and Small Enterprises to Improve Performance in Limuru Sub-county, Kenya

Abstract

Micro and Small enterprises (MSEs) play a crucial role in the new economic development of nations. Despite their significance, they face many challenges and therefore for MSEs to remain competitive and improve their performance, they have to come up with relevant strategies that would improve their performance. Limuru sub County is home to a majority of MSE’s dealing in different businesses. This study sought to evaluate the strategies adopted by these MSEs in their quest to improve performance. Objectives guiding this study were to establish the strategic response adopted by micro and small enterprises in Limuru Sub-County and to determine the extent to which the response strategies have influenced performance of micro and small enterprises in Limuru Sub-County. This study used descriptive cross-sectional survey design because the study included all MSEs in Limuru Sub County. The target population of the study was the 1,237 MSEs operating in Limuru Sub County as at June 2015. Primary data was collected using a questionnaire. The completed questionnaires were first edited for completeness and consistency. The analyzed data was presented through percentages, means, standard deviations and frequencies. The study found that MSEs in Limuru Sub County had adopted strategic responses to improve their performance. The strategies identified were diversification, strategic partnerships, differentiation and restructuring. The study further established that the strategies adopted improved performance as evidenced by increase in sales and profitability. The study concluded that the performance of micro and small enterprises has been influenced to a great extent by the strategic responses that they adopt. These enterprises can dramatically improve their efficiency and quality by focusing on customers and the process that create value for them. The study also recommends that micro and small enterprises should use technology available as a strategy to improve performance. Management should invest resources to incorporate the use of technology e.g. mobile payment so as to enhance settlement of bills and also enhance their operations.