Application of Mckinsey Growth Pyramid Strategies for Continuous Growth: A Case of Small and Medium Enterprises in Kenya.

A Project Report Submitted to the Chandaria School of Business in Partial Fulfillment of the Requirement for Degree of Masters in Business Administration (MBA)The general objective of this study was to determine the relationship between implementation of growth strategies and growth of SMEs while the specific objective involved identifying the role of operational skills in SME growth, establish privilege assets that cannot be replicated easily, identify if SMEs have the required growth skills needed for continuous expansion and establish if there is an existing relationship between partnering strategies and SME growth. The study was descriptive and cross-sectional in nature whose sample size was 70 respondents from SMEs within the Central Business District of Nairobi County trading in computer accessories and hardware. Before the questionnaire was administered, pilot testing was conducting, and the questionnaire was corrected appropriately. Data was collected using questionnaires whose answers were influenced by the Likert scale. Once questionnaires were filled, cleaning and coding was done so as to eliminate any outliers. Once the data was cleaned, the data was input into SPSS software. The analysis was presented in the form of tables, pie charts and graphs with an aim of showing the relationship between growth of SMEs and, data entry was done. In the first research objective, descriptive statistics on Operational Skills necessary for survival of SMEs indicated that respondents agreed that they were passionate about the business they were running. Likewise, the respondents agreed that leadership in SMEs encouraged employee participation informingly. In regard to operational efficiency, SMEs agreed that they strove to reduce wasted and redundancy. The respondents also agreed that communication on unclear matters was done fast and easily. In regard to human skills, respondents showed that skills and experience improved on one's output. Cost leadership indicated that the respondents did not agree on disagree on setting prices and changes in customer needs and preferences. Lastly, the respondents agreed that products sold were rare and costly to imitate. The second research objective was to identify the privilege assets not easily replicable by SMEs using one sample statistics that showed SMEs estimated customer needs and expectations. Also in regard to cost of advertising, responses showed that advertising costs reduced with time. The third research objective was in regard to the growth skill objective the four factors that were researched on were collaborations, market penetration strategies, value innovation and market development. The findings showed that respondents worked with others with an aim of venturing into new markets. Also, well-planned strategies targeting new employees were developed by the respondents. In addition, the respondents stated that they increase unique features with an aim of offering value innovation. Finally, in response to growth skills, the respondents felt that they were providing new features with an aim of targeting new customers or users. The fourth research objective was seeking to find out if SMEs were striving to implement partnering strategies. This is one objective with responses showing that, most SMEs were not franchising, creating mergers and acquisitions. However, in regard to diversification, the respondents indicated that they were involved in the diversification strategy. In conclusion, the study showed strategies adopted by SMEs with an intention of harnessing operational skills ensure that business activity runs smoothly. The contrary would result in poor allocation of operational resources such as Human resources and finances. From the study, respondents showed that SMEs strive to use operational skills so as to have growth. Despite the nature of SMEs where there is a limit to resources such as human resource this study showed that SMEs had limit to resources but the resources invested in created growth for SMEs. In regard to Privileged Assets findings indicated that SMEs adopted to strategies that caused competitive advantage. The necessary growth skill needed for continuous expansion existed among SMEs in terms of collaborations and value innovations so as to seek market development and market penetration as guided by Ansoff Marketing Matrix so as to grow market share. In terms of the fourth research objective, the findings of the study showed that fewer SMEs were involved in adapting partnering strategies hence threatening Long-run survival. The recommendation for the role of operational skills in SMEs Growth is that SMEs need to lay emphasize on investing well in resources necessary for growth specifically the human resource and financial strength with an intention of having future business. Also, SMEs need to understand their capability constantly and through constant innovation, create privileged assets that are not easily copied by competitors so as to sustain growth. In terms of necessary growth skills required for continuity, it was notable that, SMEs must continue to venture to even newer markets and create new markets and products that allow SMEs to grow and expand in terms of market share and global presence. In terms of the partnering strategies, SMEs need to venture into strategies such as franchising and joint ventures so as to ensure SMEs survives, in the long run