Competitive Strategies Entrepreneurial Orientation, External Environment and Performance of Small and Medium Enterprises in the Manufacturing Sector in Nairobi City County, Kenya.

Abstract

The purpose of this paper was to establish the influence of entrepreneurial orientation and external environment on the relationship between competitive strategies and performance of small and medium enterprises in the manufacturing sector in Nairobi City County in Kenya. Small and medium enterprises (SMEs) play crucial roles in many economies all over the world. SMEs are critical for developing countries because of their role in intensity of SME sector is much higher than that of the large enterprises. They also contribute to government revenue through payment of various taxes. The study was anchored on resource based theory and supported by game theory, open system theory and dynamic capabilities theory which provide a framework for examining the association between research variables. Resource based theory lays emphasis on the internal resources of a firm in developing its strategy to achieve a sustainable competitive advantage in its markets and industry. The study found that small and medium enterprises performance is affected by a variety of interrelated factors which should be taken into consideration inorder to achieve success and to avoid business failure. This study concludes that entrepreneurial orientation and environment have impact on SME competitive strategies adopted to improve SME performance.