Operational Strategies and Performance of Small and Medium Enterprises in Nairobi City County, Kenya
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Date
2023
Authors
Mnyazi, Mwatata
Journal Title
Journal ISSN
Volume Title
Publisher
Kenyatta University
Abstract
The Kenyan Vision 2030 envisages a vibrant SME sector as one of the key sectors meant
to make the economy industrialized by the year 2030. However, the SME sector has
recorded poor performance in the past. Because most SMEs expand naturally and in
accordance with the initial entrepreneur’s vision, many enterprises in this sector are run
in a haphazard manner. Some organizations lack suitable structures and management
processes, while in others, the original director is in charge of everything, from cash
receipts, banking, and withdrawals, to more complex entrepreneurial responsibilities.
Therefore, this study sought to examine the influence of operational strategies on the
performance of small and medium enterprises in Nairobi City County, Kenya. The study
specifically sought to examine the influence of supply chain strategy, product
development strategy, process design strategy and customer focus strategy. The study
was guided by balance score card model, resource based view theory, quality
management theory and Ansoff Matrix theory. This study adopted a descriptive research
design. The study population was SMEs based within the Nairobi City County. The
number of SMEs directly targeted was 194. A census of 194 respondents was carried out.
This is because the population for each category of the respondents was small. A
structured questionnaire was used as a data collection tool to all the respondents. A
questionnaire was piloted on 20 respondents to make sure that any error or missing item
in it is identified and addressed so as to make sure they are valid and reliable. Validity
was assessed using construct and content validity tests. Reliability was assessed with the
use of Cronbach’s alpha coefficient and the study achieved a 0.781 correlation
coefficient. Quantitative data was analyzed using descriptive statistics such as mean and
standard deviation and presented in tables, and figures. In addition, the study conducted
inferential statistics that involved correlation analysis and multiple regression analysis to
test the relationship between independent variables and dependent variable. The study
found that supply chain strategy, product development strategy, process design strategy
and customer focus strategy had a significant positive influence on the performance of
Small and Medium Enterprises in Nairobi City County, Kenya. The study concluded that
effective supply chain strategy leads to better collaboration with suppliers, better control
quality and improved risk mitigation. Process design identifies ineffective work flows,
structures, or systems, redesigns them to fit current business needs, and develops plans to
implement the new changes, promptly achieving better results throughout the
organization. Product development strategy provides an ideal framework for creating new
products or improving the performance, cost or quality of existing products. Customer
focus strategy leads to improved sales, reduce the cost to serve, increase satisfaction and
improve their operational efficiency. The study recommended that the management of
Small and Medium Enterprises in Nairobi City County, Kenya should aim to efficiently
and effectively implement lean supply chain strategy. The management of the SMEs
should discover insights that drive innovation, design a user-centered product and launch
a successful product as this will enable them increase sales of their products or services,
improve market position and boost customer loyalty. The management of SMEs should
have a structured understanding of what process design is, its objectives and how it can
help in improving the performance of the SMEs when opening a new branch or a new
department. The SMEs should put customer focus values at the heart of their culture that
unite employees under common goals even roles that do not have day-to-day customer
interactions.
Description
A Research Project Submitted to the School of Business,
Economics and Tourism in Partial Fulfillment of the
Requirements for the Award of the Degree of Master of
Business Administration (Strategic Management) of
Kenyatta University
Keywords
Operational Strategies, Small and Medium Enterprises, Nairobi City County, Kenya