Geographical Diversification Strategy and Performance of Family-Owned Businesses in Nairobi, Kenya

Abstract

Family businesses have an important role in the development of economies of emerging countries like Kenya. However, despite the numerous efforts to improve the performance of family-owned businesses in Kenya, they continue to face significant challenges that threaten their sustainability. This study aimed at determining the influence of geographical diversification strategy on the performance of family-owned businesses in Nairobi County. It was anchored on the Ansoff Matrix, adopted positivist philosophy and used ex post facto research design. The target population was top and middle managers from 226 family-owned businesses in Nairobi County. The sample size consisted of 399 respondents. Data was collected by structured questionnaires and analyzed through descriptive and inferential statistical methods. The findings established that geographical diversification strategy had a statistically significant (β=0.616, p < .001) relationship with the performance of family-owned businesses. It was concluded that geographical diversification emerges as a vital strategy for enhancing the performance of family-owned businesses. The study recommended that family business owners in Kenya should expand into diverse regions to reduce risks and boost performance. Future studies should explore the influence of geographical diversification on small versus large family businesses in Nairobi County, Kenya.