The Effect Of Business Strategy On Performance Of Small And Medium Manufacturing Enterprises (The Case Of Burayu Sub City)”.

Abstract

This study investigated the effect of Business Strategy On Performance Of Small And Medium Manufacturing Enterprises in Burayu Sub City, Oromia Regional state Ethiopia. The study used both primary and secondary data. Primary data were collected through structured questionnaire from active or new (incoming) clients. Secondary data were collected from different books. The researcher has been applied performance of SMES in manufacture Enterprises as dependent variable and; saving factor, cost leadership. Differentiation strategy and market condition as independent variables. The study was conducted at four woreda namely, Gefersa Buray, Burayu keta, Ejersa Goro and Ane Dima purposively. Using random sampling technique, 190 samples are drawn from 36 total populations and 380 respondents. Among of respondent there are 186 male and 194 female. This study examines the effect of business strategy on the performance of small and medium manufacturing enterprises (SMEs) in Burayu Sub city, Oromia Regional State, Ethiopia. The research aims to analyze how cost leadership, differentiation strategies, and external factors (market conditions and regulatory environment) influence the operational efficiency, profitability, and sustainability of SMEs. A mixed-method approach was used, combining quantitative and qualitative data collected from 380 respondents across four woredas: Gefersa Burayu, Burayu Keta, Ejersa Goro, and Ane Dima. Primary data was gathered through structured questionnaires, while secondary data was obtained from relevant literature and official reports. The respondents included managers, accountants, operational, and marketing staff from various SMEs within the sub city. The study employed descriptive statistics and multiple regression analysis using SPSS version 26 to test the relationships between business strategies and SME performance. The results showed a strong positive correlation between cost leadership strategies and overall business performance, with significant improvements in operational efficiency and profitability. Similarly, differentiation strategies contributed to customer satisfaction and competitive advantage, while external factors like market conditions and regulatory policies presented both opportunities and challenges to SMEs. The findings highlight that effective strategic planning, particularly in cost management and product differentiation is essential for SMEs to maintain profitability and adapt to changing external environments. The study recommends that SME managers implement structured business strategies to enhance competitiveness and ensure long-term sustainability. Additionally, the role of government support in easing regulatory burdens and improving market access is emphasized