Assessing the effectiveness of business strategies of small and medium enterprises in the Kawempe division of Kampala city

Abstract

The study assessed the effectiveness of the business strategy of SMEs in Kawempe Division in Kampala City. The study specifically examined the effectiveness of cost leadership, focus on market and product differentiation strategies of SMEs. The study was a cross sectional survey that used questionnaires and interview guide to collect data from a sample of 238 SMEs. Quantitative data were analysed using the SPSS computer-based software using both descriptive and inferential techniques. The study found that whereas firms placed emphasis on the cost leadership strategy, they did not place importance on attaining efficient scale facilities, they did not place importance on minimization of advertising costs and they did not place importance on attaining of efficient scale facilities. The study found that whereas the firms placed emphasis on the focus on the market strategy, they did not place focus on providing customer feedback and they did not place importance on research and development. The study found that whereas the firms employed the product differentiation strategy, they did not place importance on innovative marketing and customer service before, during and after sale of products. The study concluded that the SMEs in Kampala have effectively deployed business strategy despite the gaps. The study recommended that SMEs in Kampala City should continue pursuing cost leadership; focus on market and product differentiation strategies if they are to survive.