Business Strategies Employed by Formal Small and Medium-Sized Enterprises in Charcoal Industry to Enhance Growth: A Case of Kibra Sub-County, Nairobi County

Abstract

The purpose of this study was to examine strategies employed by formal SMEs in charcoal industry to enhance business growth despite the unique challenges faced with particular focus on Kibra Sub-county in Nairobi County, Kenya. The objectives of the study were to identifying the business growth strategies employed by formal SMEs in the charcoal industry, to examining the effectiveness of the employed business growth strategies, to establishing the challenges faced by SMEs in the charcoal industry in implementing business growth strategies and to establish measures to be put in place to ensure that strategies employed are effective. The researcher adopted descriptive research design and the target population was formal small and medium-sized charcoal entrepreneurs. The sample size was 96 respondents selected through purposive and simple random sampling. A face to face administered questionnaire was used to collect the primary data. Data was analysed using version 21 of the Statistical Package for Social Sciences computer software and findings presented in form of frequency distribution tables and charts. From the findings, majority (75.0%) of the respondents indicated that they had adopted three main business growth strategies: product development, marketing and financial strategies. Product development strategy was effective at 88.60%, marketing strategy at 77.9%, and financial management strategy at 86.1%. Most of the respondents (85.8%) indicated that they had various challenges in operating SMEs under charcoal industry among them restrictions from government authorities (94.4%), and competition from other sources of energy (93.3%). The study recommended that the government and other private institutions should work together and create a fund for SMEs to boost growth, create jobs, and improve the country’s economy.