The Effect of the Strategic Planning Process on the Performance of Dairy Agribusiness SMEs in Murang’a County, Kenya

Abstract

Kenya’s dairy agribusiness sector remains a cornerstone of rural livelihoods, yet most small and medium enterprises(SMEs) continue to face persistent constraints of low productivity, fluctuating prices, and weak managerial systems. Strategic planning therefore presents a practical mechanism through which firms can set clear goals, align resources, and respond more effectively to market and environmental pressures. Guided by the Resource-Based View and Contingency Theory, this study examined how the strategic planning process influences the performance of dairy agribusiness SMEs in Murang’a County. The specific objectives were to assess the effect of strategic planning processes on the performance of dairy agribusiness SMEs in Murang’a County. A descriptive cross-sectional design was applied to 143 enterprises registered with Kenya Dairy Board. Data collected through structured questionnaires were analyzed using descriptive statistics, Pearson correlation, and simple regression models. Descriptive results showed that dairy agribusiness SMEs in Murang’a County engaged only moderately in strategic planning. Correlation analysis revealed a positive association between strategic planning and firm performance. The bivariate regression model confirmed this relationship. Strategic planning was a significant positive predictor implying that a one-unit increase in planning effort raised performance scores by 0.25 units. The study concludes that structured and participatory strategic planning enhances both financial and non-financial performance dimensions of dairy SMEs. It recommends that county authorities and sector stakeholders strengthen training and mentorship programs to build managerial planning capacity and integrate data-driven planning tools that sustain competitiveness and growth in Kenya’s dairy value chain.