Effect of Strategic Management Practices on Market Performance of Clothing SMEs in Nakuru Central Business District, Kenya

Clothing SMEs in Nakuru CBD contribute to employment and local economic growth, yet they continue to experience fluctuating sales, intense competition from boutiques, second-hand clothing traders, chain stores and online sellers, and pressure on profitability. Limited sector-specific evidence exists on whether structured strategic management practices improve their market outcomes. Consequently, the study examined the effect of strategic management practices on the market performance of clothing small and medium enterprises (SMEs) in Nakuru Central Business District (CBD), Kenya. Specifically, the study assessed the effects of strategic planning, goal setting, resource allocation and environmental scanning practices on market performance. The study was anchored on the Resource-Based View, Goal-Setting Theory and Dynamic Capabilities Theory and adopted a descriptive correlational research design. The target population was 132 owners, supervisors and sales staff drawn from 16 licensed clothing SMEs. A sample of 112 respondents was selected through census and stratified random sampling. Primary data was collected using a structured questionnaire, and 94 usable questionnaires were returned (83.9% response rate). Data was analysed in SPSS Version 29 using descriptive statistics, Pearson correlation and multiple regression analysis. Findings revealed that all four practices had positive and statistically significant effects on market performance, jointly explaining 79.6% of its variation (R² = 0.796; F(4, 89) = 86.743, p < 0.001). Strategic planning had the strongest effect (β = 0.342, p < 0.001), followed by environmental scanning (β = 0.311, p < 0.001), goal setting (β = 0.258, p = 0.002) and resource allocation (β = 0.214, p = 0.006). In light of the findings, the study recommends that clothing SMEs should institutionalise formal strategic planning, set measurable performance targets, allocate resources in line with strategic priorities and continuously monitor their business environment, and that the County Government of Nakuru and SME support agencies strengthen capacity-building programmes in strategic management.