Influence of Focus Strategy on Performance of Small and Microenterprises (SMES) in Machakos Town, Machakos County, Kenya

Abstract

The objective of this study was to establish the influence of focus strategy on performance of small and micro-enterprises (SMEs) in Machakos Town.The study employed a mixed research design where were both quantitative and qualitative data was collected and used. The target population consisted of all the 40 electronics outlets obtained from Machakos county Single Business Permit licensing office and which are operating within Machakos town and environs. The study employed a total population census sampling technique. The census sampling approach was adopted on the total population of 40 electronics retail shops in Machakos town The choice of census sampling approach was guided by various reasons including; need to increase the accuracy of results and easy accessibility of population elements. The study used questioners to collect primary data. Questionnaires are effective tools used to collect data from available respondents who are willing to co-operate. The study conducted a multiple regression analysis to establish the nature and magnitude of the relationship between the competitive strategies and performance of SMEs in Machakos town. The multiple regression analysis helped pick weight that the independent variables (competitive strategies) had on dependent variable (SMEs performance). The study revealed that SMEs which adopt focus strategies concentrate on particular niche markets and, understand the dynamics of that market and the unique needs of their customers then develop uniquely low-cost or well-specified products for the said market. Unique customer’s service offered by SMEs in their market results to a strong brand loyalty amongst their customers. Recommendations: The study recommends while adopting a narrow focus, that the SMEs ideally need to focus on a few target markets also called a segmentation strategy or niche strategy. These should be distinct market segments with specialized needs.