Differentiation Strategy and Performance of Small and Micro Manufacturing Enterprises in Nairobi County, Kenya

Abstract

Currently, firms are losing their energy to find methods that offer them to maintain their existing position in the market, as well as to increase the market share and profit and find a way to survive in that market. The main objective of this study was to determine the influence of Porter's generic business strategies on the performance of Micro and Small Manufacturing Enterprises in Nairobi County, Kenya. The research was grounded on competitive business strategy theories. The study adopted the descriptive research design. The target population of this study comprised the business owners/managers of the 596 cottage industry firms operating within the county. The unit of analyses of this study consisted of 596 Micro and Small Manufacturing Enterprise. The unit of observation of this study was business owners/managers. The sample drawn using the Yamane formula was 239 respondents. The researcher collected data using the questionnaire method. Quantitative data were coded into numerical codes, which represented various variables. These codes were then captured into a computer for analysis. The study concluded that there is a positive and significant relation between differentiation strategy and the performance of cottage industry firms in Nairobi County. The study recommends conducting extensive market research to determine the specific needs of the market. The study further recommended that firms should take advantage of the feedback provided by customers as the main market players and integrate the feedback into developing innovative products and services. The study further recommends the development and production of consistent and quality products to retain relevance in a competitive market, boost market share growth and reinforce the performance of the organization.