GROWTH STRATEGY AND PERFORMANCE OF SMALL AND MEDIUM ENTERPRISES IN KENYA

Abstract

The paper purposed to examine the influence of growth strategy on performance of small and medium enterprises in Kenya. An overview of selected small businesses within central business district of Nairobi, Kenya was done. Its specific goal being to assess the influence of growth strategy on performance of small enterprises in Kenya. The paper was anchored on resource-based view theory. The author utilized descriptive research approach that targeted 868 small enterprises in Nairobi. Stratified random sampling techniques were employed to select 273 small owner managers to provide primary data through questionnaires. Questionnaire data was systematically analyzed to extract inferential statistics through regression, and descriptive data were expressed in term of frequencies and percentages. Based the analysis, the research findings indicate that growth strategy exhibited a positive and significant association with performance of smaller businesses. The study concluded that growth strategy possessed a positive and significant association with performance of small enterprises. Among recommendations, the authors suggested that all smaller enterprises should implement suitable growth strategies-that include penetration of the market, development of new market, diversification and development of new products - that fit their business models in order to penetrate the markets and possibly gain a larger share of the market. The study results are expected to aid owner managers of small business as they will be able to comprehend and appreciate the effective business strategies that enable firms to achieve sustainable growth and institute remedial action to counter these hurdles and enhance effective execution of organization’s strategies. They will also aid the government to understand the challenges facing small enterprises and this will help them to come up with new policies and legislations that will seek to support the SMEs sector. Finally, the findings will serve as secondary source to future researchers and scholars in their studies on small enterprises. To boost small enterprises, further studies have been suggested on effect of innovation initiatives on performance of smaller business entities.