Challenges Facing Kenyan Micro and Small Enterprises in Accessing East African Markets: A Case of Manufacturing Mses in Nairobi

A Research Report Submitted to the Chandaria School of Business in Partial Fulfillment of the Requirement for the Degree of Masters in Business Administration (MBA)The purpose of the study was to investigate the challenges facing Kenyan MSEs in accessing the East Africa Market with an inclination to manufacturing MSEs in Nairobi CBD. The study was guided by the research questions that were aimed at determining the East Africa markets accessed by manufacturing MSEs from Nairobi, finding out the major challenges manufacturing MSEs face in accessing the East Africa markets and establishing the strategies that can be used by small and medium enterprises to cope with East Africa market challenges. A descriptive research design was used in this study. A total of 431 management staff of the following categories the top level managers, middle level managers and lower level managers of the listed MSEs companies in Kenya was used to collect the data. The sample used was 30 percent of the target population which was 129. Stratified sampling technique was used to select the respondents from Kenya Manufacturing Association (KAM) list of manufacturing MSEs in Nairobi County. The researcher used primary data for this study and data was collected using questionnaires. The quantitative data in this research was analysed by descriptive statistics using statistical package for social sciences (SPSS) version 20. Data was presented in tables. Content analysis was used in processing of qualitative data and results presented in prose form. The researcher found that East Africa markets which are accessed by manufacturing MSEs in Nairobi County. Included; Uganda, Tanzania, Rwanda and Burundi. The researcher found that technological advancement, legal changes factors, political change, cultural and language and change in customer preferences as the major challenges facing manufacturing MSEs. The researcher found that organizations formed strategic alliance with firm in foreign market, forged joint ventures with international strategic partners and outsource non-core business activities in order to concentrate with core business activity. The study concludes that Kenya’s main MSEs manufacturing access market is to the East African Community (EAC)-Uganda, Tanzania, Rwanda and Burundi. The study concludes that the challenges MSEs face in accessing East Africa markets included; innovation development, legal changes factors, political change and financial access. The study concludes that implementing product positioning in the market, focusing on target market and enhancing efficient product delivery as well as manufacturing quality products should be used as a competitive positioning strategy. MSEs should also implement new ideas in manufacturing in response to stakeholders needs and acquire new and advance equipment for improving manufacturing process as a way of coping with challenges. The researcher recommends that manufacturing MSEs should also focus on the following markets since they have great business potential European markets, Chinese market, South African market, United States and Asian market. The researcher recommends that organizations’ should integrated information systems, engage in research and development in production of new products, change production techniques and product mix and becomes more innovative, differentiating products to suit the market needs and forming industry networks with suppliers