Effect of Growth Strategies on the Performance of Small and Medium Sized Enterprises in the Information Technology Sector in Nairobi County, Kenya.

Abstract

This study sought to establish the effect of growth strategies on the performance of small and medium sized enterprises (SMES) in the Information Technology (IT) sector in Nairobi County, Kenya. The objectives of the study were to establish the performance of SMEs in the IT sector in Nairobi County, Kenya; to identify growth strategies employed by SMEs in the IT sector in Nairobi County, Kenya; and to determine the effect of the growth strategies on the performance of SMEs in the IT sector in Nairobi County, Kenya. The study employed a descriptive research design and had a target population of 15 SMEs in the IT sector in Nairobi County, Kenya. Stratified convenience sampling was used and a sample of 91 was selected. The sample comprised employees from the 15 selected IT SMEs. Data was collected by use of a questionnaire, and Statistical Package for the Social Sciences (SPSS), version 23 aided in analysis of the data. Tables and figures were used in presenting the analyzed data. The study established that most SMEs in the IT sector performed well; product development and diversification were the two strategies that were mainly embraced by the SMEs; and that adoption of growth strategies had a positive effect on the performance of SMEs in the IT sector in Nairobi County, Kenya. One of the study’s recommendations was that SMEs could consider adopting product development and/or diversification as growth strategies so as to ensure organizational growth.