FACTORS INFLUENCING THE PERFORMANCE OF FOOTWEAR INDUSTRY IN ETHIOPIA: THE CASE OF SELECTED SMES IN ADDIS ABABA

Abstract

The Government of Ethiopia give the leather footwear industry as a priority area because of the fact that the sector has a huge potential of livestock population, its performance is unsatisfactory due to external and internal problems that hinders its competitiveness in the market specially the local leather footwear manufacturing firms. Thus the aim of this study is to analyze the factors influencing the performance of footwear industries in case of SME in Addis Ketema. Pertinent data were gathered through structured questioner. Stratified sampling technique was used to collect data from 290 respondents working in the footwear industry. The determinant factors are capital, technology, consumer, brand awareness, managerial practices, competition and productivity analyzed based on the selected conceptual framework. Quantitative research approach was applied in order to achieve research objectives. The research applied mixed research approach and descriptive design. The results of the study indicate that most of the respondents were male, adult, with legal formation of enterprise and having 3-5 years of business experience and they agreed that the company were positively affected by the influencing variables such as technology, access to finance, managerial practice and fair competitions and brand reputations. The other results of the study indicate that the highest agreement level recorded in the area were access to finance questions and brand reputation respectively. Based on the research finding in order to increase the performance of local footwear firms in the market, it is recommended that firms have to improve their financial status, technological capability, management practice and competition. On the other hand, the government has to introduce special incentives, that promote the manufacturing industry in terms of finance accessibility and promotional support in addition to this the government should provide trainings, seminars and workshops.