Abstract
Purpose: The purpose of this study was to determine the influence of competitive strategies on the performance of small and medium enterprises in Kenya.Methodology: The study employed a descriptive correlation design using primary data collected using questionnaires. The study targeted 4,560 SMEs in Nairobi CBD. The collected data was coded and entered into SPSS (V.20) to create a data sheet that was used for analysis. Data was analyzed using quantitative techniques. Descriptive statistics were used to describe the characteristics of collected data. Pearson’s Correlation, Analysis of variance (ANOVA) and Multiple Regression Analysis were used to establish the relationships among the study variables.Findings: Cost leadership, differentiation, market focus and strategic alliance were all found to have a positive and significant influence on SME performance.Unique contribution to theory, practice and policy: The study recommended that: SMEs should embrace and invest in cost leadership strategies most especially forming linkages with service providers, suppliers and other supplementary institutions since it will enable them achieve competitive advantage; SMEs ought to focus and invest more on differentiation as it could be used as a major competitive advantage tool against competitors; SMEs should know on what basis to segment their products, services and operations; and that SMEs should embrace strategic alliances to increase their market share.