INFLUENCE OF STRATEGIC MANAGEMENT PRACTICES ON PERFORMANCE OF SMALL AND MEDIUM ENTERPRISES IN MOMBASA COUNTY
Abstract
This study investigated the influence of strategic management practices on performance of small and medium enterprises in Mombasa County. The target population for the study was the top 100 SMEs in Mombasa CBD. Stratified sampling was adopted. The sample comprised of 50% of the target population. Hence the sample size was 50 SMEs. The study concluded that the external environment played a crucial role on the SMEs decision to adopt various strategies. Issues of critical concern to the SMEs included; the economic situation, social factors, the technological concern and the uncertain competitive environment. The internal environment of the SME also played a crucial role to the SME’s adoption of new strategies; these factors include: top managers’ ability to develop effective strategies, internal processes, firm’s resources, SMEs behavior and characteristics. Strategic management had a positive relationship with competitive advantage of the organizations. It was established that SMEs adopted various strategies in order to achieve competitive advantage. SMEs carried out external analysis and internal analysis to know the strategies to adopt as both internal factors and external factors affect the company’s strategic decision making. These strategies include market strategy, products reputation, customers‟ differentiation, product pricing, cost control, technology, quality of the product, product and service innovations and customer service strategies. Lastly, it was concluded that strategic management practices enhance performance of SMEs. The study recommended that SME management needs to have a positive rethink towards the use of strategic management and have the right resources as the success of a business or strategy depends primarily on the value judgment, energy and skill of its top managers and the strategic implementation within the context and parameter of the uncertainty and ambiguity of the environment subjected to volatility. It also recommended that internal factors such as internal processes, top managers’ ability to develop effective strategies, firm’s resources, organizations behavior, therefore strategic training is recommended to top management and all employees in the SMEs in order to enhance their performance.
Key terms: SMEs, strategic planning, strategy implementation, strategy
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DOI: http://dx.doi.org/10.61426/sjbcm.v4i4.586
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