Effects of Strategic Planning on Performance of Small and Medium Enterprises: The Case of SMEs in Nairobi


  • Audrey Omusundi Akolo The Catholic University of Eastern Africa
  • Dr. Benjamin Mulili The Catholic University of Eastern Africa
  • Dr. Anne Kiboi The Catholic University of Eastern Africa


Strategic Planning Strategy Selection, Strategy Implementation, Strategic Evaluation, Small and Medium Enterprises & Performance


The main objective of this study was to assess the effects of strategic planning on performance of small and medium enterprises in Nairobi CBD. The research addressed three specific objectives, namely, to establish the effect of strategy selection on performance of small and medium enterprises in Nairobi CBD, to determine how strategy implementation affects performance of small and medium enterprises in Nairobi CBD and to assess the extent to which strategic evaluation affects performance of small and medium enterprises in Nairobi CBD. The study adopted a descriptive research design in establishing the relationship between strategic planning and performance of small and medium enterprises. The population was the management/owner of small and medium enterprises in Nairobi Town. According to Nairobi City County Records (2016), there are approximately 600 SMEs in the CBD. Data for the study was collected from a sample of top management of small and medium sized enterprises in Nairobi town. The researcher adopted stratified random sampling, the reason being that it is suitable for large populations. Data was collected through questionnaires. Specific closed ended questions were incorporated in the questionnaires which aimed at capturing specific information. The questions followed the Likert scale format for each objective where respondents were asked to rate the responses indicated in tabular form on a scale of five (5). The study concluded that SME managers are required to ensure that they prepare a  strategic  plan  that  sets  out  annual  objectives, establishes an  effective organizational structure, fixes a budget, develops a viable information  system  and  generally  devices a work  plan  for  job  execution. The study recommended that having prepared the strategic plans alone does not guarantee success. The SME managers should thus go a step further and ensure that the strategic plans are followed to the letter. SME owners should set achievable goals and subdivide them into short-term, medium-term and long-term goals. There is need for the owners and management teams of SMEs to categorize the factors that affect strategic planning in their businesses. SME managers should also work towards mitigating the effects of any factor seen to be acting as barriers to strategic planning.

Keywords:  Strategic Planning Strategy Selection, Strategy Implementation, Strategic Evaluation, Small and Medium Enterprises & Performance.

Author Biographies

Audrey Omusundi Akolo, The Catholic University of Eastern Africa

Postgraduate Student

Dr. Benjamin Mulili, The Catholic University of Eastern Africa


Dr. Anne Kiboi, The Catholic University of Eastern Africa



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How to Cite

Akolo, A. O., Mulili, D. B., & Kiboi, D. A. (2018). Effects of Strategic Planning on Performance of Small and Medium Enterprises: The Case of SMEs in Nairobi. Journal of Strategic Management, 2(4), 65–84. Retrieved from https://stratfordjournals.org/journals/index.php/journal-of-strategic-management/article/view/200