Strategic Planning and Competitive Advantage of ICT Small and Medium Enterprises in Kenya: The Kenya SMEs SectorSmall and Medium Enterprises are considered as the most prolific source of employment, with the ability to spread investment across the country (Sessional Paper No.2, 2005). The sector is noted a provider of goods and services, and a driver in promoting competition and innovation, enhancing the enterprise culture necessary for private sector development and industrialisation (Republic of Kenya). Likewise, the SMEs sector employs 74% of the labour force and contributes over 18% of the country’s GDP. In Kenya, a small enterprise consists of those firms with 10-50 employees, annual turnover of between 6,000 USD and 60,000 USD and investment of between 60,000 USD and 240,000 USD. A medium-size enterprise would have 50-100 employees, annual turnover of between 60,000 USD to 10,000,000 USD.
Since Independence, the government has recognised the potential of the Small Enterprise (SE) sector in employment and poverty reduction. This objective has been outlined in Sessional Paper No. 1 of 1986 on Economic Management for Renewed Growth, Sessional Paper No. 2 of 1996 on Industrial Transformation to the year 2020, the Sessional Paper No. 2 of 2005 on the development of MSEs for Employment and Wealth Creation (Republic of Kenya 1986, 1996, 2005). It recognised the need to establish and maintain a conducive environment for the graduation of SMEs to have more capacity to produce high quality products and create sustainable employment opportunities.

Kenya Vision 2030 has identified Information and Communication Technology (ICT) as a key engine of growth, as it is a key investor in people services and networks. The development of SMEs in ICT sector is important in contributing to the attainment of Vision 2030’s strategic objective of middle-income industrialised status by 2030.
Despite the numerous policy prescriptions, and the overwhelming evidence on the role and potential of SMEs in wealth creation, the sector is faced with various challenges and constraints that inhibit or constrain its growth. These include among others, unfavourable policy environment, access to financial resources, inadequate access to skills and technology, limited access to infrastructure, inadequate business skills, limited linkages with large enterprises and limited access to information, and lack of knowledge about customer’s needs(Baseline Survey, 1999 and Sessional Paper No. 2 of 2005). The effect of this is less growth in the SME sector and high failure rate. Grant (2008) asserts that knowing what customers want and how a firm survives competition are prerequisites for success. SMEs can use strategic planning tool to develop strategies and gain competitive advantage. According to The Economist (2012), the link between small firms and jobs growth relies entirely on new start-ups, which are usually small. Given the above scenario the objective of this study was to establish whether strategic planning influences competitive advantage of ICT SMEs performance in Kenya.