EFFECT OF SOURCING ON THE PERFORMANCE OF RETAIL SME’s IN KILIFI COUNTY, KENYA

Ahmed Mohamed Dahir, Dr. Miriam Thogori

Abstract


SMEs are critical drivers of economic growth, but often face challenges in optimizing supply chain processes, which negatively affect their operational performance. This study investigated the effect of sourcing on the performance of small and medium enterprises (SMEs) retail stores in Kilifi County, Kenya. The study was guided by resource-based view. The study adopted a descriptive cross-sectional design. The target population for the study comprises all registered retail SMEs in Kilifi County. The respondents were 227 SME owners/managers. The Yamane formula was employed to determine the sample size. The study sample size was 145 respondents. The simple random sampling was used to select the study sample. Primary data was gathered from Kilifi County's SME respondents. Both closed-ended and open-ended structured questionnaires were used in the study to gather data. Data collection was conducted through self-administered questionnaires distributed to the selected SMEs. The Statistical Package for Social Sciences (SPSS) version 28 was employed for data analysis, utilizing both descriptive and inferential statistics. Descriptive statistics, including frequencies, percentages, means and standard deviations, provided an overview of the basic characteristics of the dataset. Inferential statistics involved correlational and regression analyses. Specifically, Pearson moment correlation was used to assess the relationships between independent and dependent variables, while regression analysis showed how much one factor influences another. Quantitative findings were illustrated in tables, showcasing mean and standard deviation values to facilitate interpretation and comparison of responses. The study found that sourcing had a significant and positive effect on performance of SMEs retail stores in Kilifi County. The study recommends that SMEs should explore and establish relationships with a wider range of suppliers to reduce reliance on single sources. This can mitigate risks associated with supply disruptions and price fluctuations.

Key words: Sourcing, Performance, SMEs


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