EMPIRICAL VALIDATION OF AN MICRO AND SMALL ENTERPRISES TYPOLOGY: IMPACT OF PERFORMANCE ON MICRO AND SMALL ENTERPRISES IN NAIROBI

Abstract

The Micro and Small Enterprises (SMEs) typology suggests competitive business strategies that MSEs can use to overcome the challenges they face and improve their performance. The typology combines strategic alliance (collaboration) and competency (differentiation and low cost) theories. The general objective of this study was the empirical determination of the extent to which the application of business strategies based on the MSE typology is associated with better performance. The study was carried out among Nairobi informal sector MSEs in the manufacturing sector. From the results, the ideal types captured in the typology were supported. In addition, there was partial support of better performance among four of the nine classes of strategies within the typology. These accounted for 64.8 percent of the sampled enterprises. None of the enterprises that did not fit into any of the classes, however, performed better than those that did.