An exploratory study of the opportunity identification process amongst high impact small and medium sized enterprises in Kenya

Date
2014
Authors
Kanaiya, Sarah
Journal Title
Journal ISSN
Volume Title
Publisher
Strathmore University
Abstract
There is growing evidence that SMEs play a key role in the economies of developing countries in terms of contribution to employment and GDP. The most common definitions of high impact SMEs classify them as those that create jobs, or register revenue growth, at an annual average rate of at least 20% per annum. As such, they are important actors in the national economy. Since opportunity identification is a key trigger to enterprise formation, an understanding of the opportunity identification process amongst high impact SMEs in Kenya provides a logical starting point for arriving at a better understanding of how these entities were established. Studies of opportunity identification among high impact Kenyan SMEs are rare. This was an inductive study, using a qualitative approach, as the objective was to develop a preliminary theoretical framework about how founders of high impact SMEs identified the opportunities that led to the creation of these firms. The study involved in-depth interviews with the founders of 9 Kenyan SMEs. The findings of the study are that both internal and external factors impact opportunity identification triggering an idea about a potential opportunity. The internal factors include passion, education and experience, and these create a sense of technical self-efficacy and entrepreneurial self-efficacy. The external factors include information from a variety of sources (media, travels, neighborhood or a new emerging trend). Market research is then used to confirm the commercial viability of the opportunity. This information can be used by emerging practitioners to inform their opportunity identification processes. Enterprise development initiatives such as those established by the government to provide funding and business development support to new businesses, can similarly use this information as they work with emerging entrepreneurs and seed stage businesses to enable them identify opportunities. In such cases, the businesses created may have a better chance to develop into high impact SMEs and make significant contributions to job creation.
Description
Submitted in partial fulfillment of the requirements of the Degree of Masters of Business Administration
Keywords
Opportunity identification, Small and Medium sized enterprises, Kenya
Citation
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