Competitor Orientation and Performance of Small and Medium Enterprises in Kenya

Abstract

Many countries recognize that, apart from development, SMEs play an important role in ensuring economic stability, growth, job creation, and social cohesion. Despite the importance of the SME sector in developing economies, these businesses face various challenges including a lack of working capital, diversion of income for other purposes, and personal problems. This study sought to determine the effect of competitor orientation on performance of SMEs in Kenya. The study also sought to establish the moderating role of information technology capability on competitor orientation as pertained to the performance of SMEs in Kenya. The study adopted a cross-sectional survey research design and, the targeted population was SMEs. The sample population was a census of the top 100 Small and Medium-sized firms. Data was analyzed using descriptive and inferential statistics. The study established that the implementation of competitor orientation strategies affects the firm performance positively. Information technology capability causes a positive effect of competitor orientation on SME performance but not significant. Competitor-oriented firms are quick to develop new products and defend their product market share through adequate brand-oriented actions. The management therefore can ensure that competitor-oriented talents are nurtured in their firms.