Dimensions of competitive advantage and the performance of medium scale manufacturing enterprises in Nairobi City County Kenya
Thomas, Evans Mwasiaji
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The problem of the study was that the Medium Scale Manufacturing Enterprises in Kenya have continued to decline in their performance as shown by Kenya’s Economic Survey results. The purpose of this study was therefore to analyse the dimensions of competitive advantage and the performance of medium scale manufacturing enterprises in Nairobi City County. The study also sought to determine the moderating effect of environmental constraints on the relationship between the individual competitive factors that influence the performance of Mediums Scale Manufacturing Enterprises in Nairobi City County. A total of 485 enterprises were identified from the various economic activities in the manufacturing sector. However, only ninety MSMEs fell within the study’s geographical setting and the required employment level of between 51 and 200 employees as per the study’s definition of an MSME. The targeted ninety (90) Nairobi based Medium Scale Manufacturing Enterprises were all included in the study. The data was collected using a self administered questionnaire and analysed using descriptive and inferential statistics. The study revealed a competitive index at 59.42% across board. The most constrain experienced by majority, 63.6% of the firms were extent of government regulation and compliance costs and weaknesses in transportation and infrastructure development. 31.8% of the firms had limited information on possible markets and clients. In addition, about 47.0% of the respondents indicated that the current legal framework is complicated, while 45.5% proposed that the government need to remove overlapping roles of the institutions with regulatory roles. The study recommends that at the macro level, the Kenya government and international bodies such as the World Bank and International Monetary Fund, should work together in the creation of a predictable macro economic environment to include a realistic exchange rate regime, and put in place a general policy framework that can stimulate pure competition and further support the growth of Mediums Scale Manufacturing Enterprises. At the national level, the meso level Government institutions should come up with support programs and targeted policies geared towards strengthening the performance of Medium Scale Manufacturing Enterprises in terms of entrepreneurial training programmes, supportive infrastructure, appropriate technology acquisition and development. At the micro level, the Medium Scale Manufacturing Enterprises should work towards the improvement of their entrepreneurial and managerial competencies, quality of the human resources, continuous value addition to the production processes, the building of cooperation networks and alliances along the value chain. Consequently, this study is not only useful in the design of support policies, but also the related theoretical support to the programs addressing poverty alleviation through employment creation, considering the increasing unemployment rate among the young school leavers and graduates, who are now confronted with a dramatic increase in international competition in the labour market.