An analysis of the impact of environmental scanning on the performance of Small and Medium Retail Enterprises in Harare

Abstract

Small to Medium enterprises in Zimbabwe are faced with serious challenges related to the prevailing turbulent operating environment. Due to increased competition, economic uncertainty, technological advances, regulatory changes, increased customer expectation and globalization, SMEs have realized the need to scan their operating environment. The retail sector in Harare has seen many SMEs businesses closing down and generally performing below expectations. The research study sought to analyze the relationship between environmental scanning and business performance of the Retail SMEs in Harare. The environmental scanning factors identified in the study were frequency of scanning, use of different scanning information sources and use of scanning techniques/tools. A quantitative study was conducted which used the survey as the research strategy. A self-administered questionnaire was used as the research instrument for data collection. A total of 150 Retail SMEs in Harare were sampled using simple random sampling technique. The respondents were selected from Retail SMEs owners/managers who were present at their workplaces. The data processing was done using SPSS, correlation and regression analysis were applied to test the relationship between the variables. The research study results showed a strong positive relation between environmental scanning and performance of retail SMEs in Harare. It was recommended that Retail SMEs in Harare should conduct environmental scanning as it leads to increased business performance. They should increase the frequency of scanning, collect information from a wide range of sources and fully utilize the scanning techniques such as SWOT and PEST analysis. The researcher suggested further research studies to incorporate different business sectors like manufacturing, travel and hospitality and mining.