Kenyan entrepreneurs, big and small, are accused of not advancing beyond the duka mentality. They do not commit to or come up with business strategy. Yet benefits of strategic management are evident.
Strategic management is more than a buzz phrase. It is a concept important for all businesses. It doesn’t matter whether you are that Kenyan entrepreneur opening a hardware store somewhere or you are the middleman importing things to sale in the local market. Neither the scale of your operations nor your level of experience as an entrepreneur absolves you from having a solid strategy.
What is this strategic management thing? How do you go about it? First, it calls for your continuous assessment of the business’ capacity to meet the goals you laid down. You have to advance beyond being trapped in the day to day quagmire that is running a business.
Research conducted by DBA Africa Management Review infact showed that a majority of Kenyan entrepreneurs do not rise above this. The findings revealed that entrepreneurs hinder their progress by focusing primarily on the rudimentary stuff of sales minus cost of goods sold. Kenyan entrepreneurs were shown to be miles behind, in terms of strategic management, when compared to foreign businesses in the country.
You need to know what your business is all about. You must be able to answer this question without the “umm”, “err” or overly elaborate hand gestures (let’s stop that people). It’s cliché but true that the mission statement is that answer. The study did find that foreign businesses are more inclined to having mission statements, contrary to local entrepreneurs.
After this is when you can determine who you will sell to. Know what your market segment prioritizes when making purchases. Know the value they place on pricing. It is from knowing these that you will be able to come up with the appropriate image for your business. Carrefour and Ukwala are both just retailers, right? But your mind thinks one has more “prestige” than the other. Admit it.
Most of the gains from strategic management lie in conducting SWOT analysis. On one hand you look at the advantages your business has in attaining goals and on the other the disadvantages. Strengths and Opportunities analysis reveal the respective positive internal and external aspects that make it easier for your business to achieve its goals.
Weaknesses and Threats analysis cover the respective negative internal and external hindrances to realizing goals. In whole, a SWOT analysis makes you set realistic goals for yourself to avoid losing motivation as an entrepreneur.
When most of the process of strategic management is done, you look at your competition. Don’t just focus on their pricing. Do not forget that competition is not just the establishment but entrepreneurs, like you, who are entering the market as well. This will allow you to develop the flexibility to respond to moves by the competition.
In all this, remember the core concept. Strategy does not end with your business plan or when you’re soliciting for funding. It is a continuous process; you improve your strategy as the industry changes. You should always engage in it deliberately as well.