Abstract
Purpose: The ever dynamic competitive business environment pose major challenges to SMEs like many other organizations in Kenya and managers have been struggling to compete favorably. According to Porter, superior performance can be realized through pursuit of a competitive generic Strategy. Hence identification and pursuit of the right competitive strategies as a source of superior performance has become a priority in many organizations. Be that as it may, the application of the right strategies is still a concern in many SMEs which have made little effort to comprehend how Generic Strategies can give them a performance advantage over their rivals. Thus, the objectives of this study included examining the effect of Cost leadership, Differentiation and Focus Strategies on the performance of SMEs in Kiambu County.
Methodology: The study was guided by Porters Competitive Strategy Theory, Resource Based View Theory and Resource Dependence Theory. A descriptive research design will be used targeting 889 SMEs belonging to different sectors; manufacturing has 113, agricultural has 226, essential services that include private schools and health facilities have 217, general merchandise like shops and supermarkets have106, commercial services and other service industries are a total of 227. Proportionate sampling technique was used to select the sample size. Data was collected using questionnaires and then analyzed using correlational and regression analysis. Data was presented in form of means and standard deviation by means of tables.
Findings: The findings of the study confirmed that Differentiation, Cost leadership and Focus strategy had a significant influence on the performance of Small and Medium Enterprises in Kiambu County.
Unique contribution to theory, practice and policy: The study therefore recommends that the government comes in handy to support the SMEs by providing legislation aimed at providing a conducive environment to allow for full operationalization of Competitive strategies which would consequently translate to national economic growth.