Carolyne Chumo Sossion


The operations of any organization are affected by influences emanating from both internal and external environment. Most of those from internal environment are effectively addressed by the management. However, the external environment in which organizations operate is characterized by constant changes resulting from remote factors that are beyond the organizations capability to respond. A host of external factors influence a firm’s choice of direction and action and ultimately its organizational structure and processes. Coping with the increasingly competitive and dynamic environments therefore calls for SACCOs to continuously rethink on their strategies.

The main objective of this study  was  to assess the influence of external environment on strategies adopted by deposit taking SACCOs and the population of interest  comprised of all the 35 deposit taking SACCOs in Nairobi County.  This study adopted a descriptive research design and collected primary data using structured questionnaires.  Descriptive statistics was used to analyze data by way of percentage or proportion, mean and frequency distribution. The data analysis tools of Statistical Package for Social Sciences (SPSS) version 21 were used, to give a deeper insight into the responses from the respondents into the subject of the research.

The findings of the study revealed that the deposit taking SACCOs in Nairobi County face many challenges due to constantly changing external environment and therefore they have to set out strategies in order to adapt to the challenges. These environmental factors include political/legal factors and technology related factors.  Based on the findings of the study, the researcher recommended that the management of the SACCOs should also concentrate on product development strategies such as product refinement, developing new products for the existing, expanding the product lines in response to the environmental challenges facing the SACCOs. These will assist the SACCOs maximize revenue from the existing market and therefore remain competitive. This is because SACCOs target a particular group of people who have common interests and such SACCOs as Staff SACCOs have a limited number of members especially the ones serving members of staff in small organizations. Diversification strategies also need to be considered in order to increase their market share.

Key Words: External Environment, Strategies, Deposit Taking

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