RELATIONSHIP BETWEEN COMPETITIVE STRATEGIES AND ORGANISATION PERFORMANCE AMONG FOUR AND FIVE STAR HOTELS IN NAIROBI COUNTY
Abstract
Strategic management is a collection of management actions and decisions used by an organization to achieve increased performance and retain a competitive edge over competitors. Organizations deploy competitive strategies with mixed effects on performance. The purpose of this study was to assess the relationship between competitive strategies and the performance of five star hotels in Nairobi County, Kenya. Specifically, the study examined the extent to which differentiation strategy, cost leadership strategy and focus strategy affect organization performance four and five start hotels in Nairobi County, Kenya. A descriptive cross-sectional survey of four and five star hotels was conducted using a questionnaire to collect data on competitive strategies. Data on performance was obtained from the ministry of tourism and from online sources. This study adopted descriptive research design and targeted general managers and assistant general managers of four and five star hotels in Nairobi County, Kenya. Quantitative approaches were used for data analysis whereby Statistical Package for Social Sciences (SPSS version 23) was used to run descriptive statistics such as frequency and percentages, regression model was used. This study may be significant to the management in five star hotels in Nairobi County as it may assist them formulate and deploy appropriate strategies to achieve the set goals, objectives and remain relevant in the ever changing environment and position in the five star hotels' strategic success in the future. The study findings revealed that performance of four and five start hotels in Nairobi County, Kenya was significantly related with cost leadership strategy (p < 0.05) and focus strategy (p < 0.05). However, the relationship between differentiation strategy and performance was insignificant at p > 0.05 but only significant at p <0.1). It was also found that while differentiation strategy had a negative influence on performance (t = -.240, p >0.5) both cost leadership strategy, and focus strategy had positive influence on performance (cost leadership strategy: t = 0.363, p <0.05; Focus Strategy: t = 5.266, p <0.05). The implication of these findings is that managers in four and five start hotels in Nairobi County, Kenya need to adopt cost leadership strategy and focus strategy, which would positively contribute to performance. The four and five start hotels in Nairobi County, Kenya should continue emphasizing on product differentiation strategy.
Key Words: Differentiation Strategy, Cost Leadership Strategy, Focus Strategy
CITATION: Nyambok, A., Senaji, T. A., & Awino, D. O. (2021). Relationship between competitive strategies and organisation performance among four and five star hotels in Nairobi County. The Strategic Journal of Business & Change Management, 8 (3), 953 – 967.
Full Text:
PDFReferences
Akintokunbo, O. (2018). Market Focus Strategy And Organizational Performance Of Telecommunication Companies In Port Harcourt, International Journal of Innovative Research and Advanced Studies (IJIRAS), 5( 3), 258-263.
Alice B. Chepchirchir, Francis Omillo, Jennifer Munyua (2018). Effect of Cost Leadership Strategy On Organizational Performance Of Logistics Firms At Jomo Kenyatta International Airport, Kenya, European Journal of Management and Marketing Studies, 3(3), 234-256.
Amoako-Gyampah, K.; Boye, S.S. (2001). Operations strategy in an emerging economy: The case of the Ghanaian manufacturing industry, Journal of Operations Management, 19(1), 59–79.
Atikiya, R., Mukulu, E., Kihoro, J., &Waiganjo, E., (2015). Effect of Cost Leadership Strategy on the Performance Of Manufacturing Firms In Kenya, The Strategic Journal of Business and Change Management, 2 (8), 134-143.
Atuahene-Gima, K., & Ko, A. (2001). An empirical investigation of the effect of market orientation and entrepreneurship orientation alignment on product innovation. Organizational Science, 12(1), 54–74.
Barney, J. B. (1991). Firm resources and sustained competitive advantage, Journal of Management, 17(1), 99–120.
Barney, J. B. (2001). Is the resource–based ‘view’ a useful perspective for strategic management research? “Yes”, Academy of Management, Review, 26(1), 41–56.
Best, J.W. and Kahn, J.V. (2012). Research in Education. New Delhi : Prentice Hall of India Private.
Birjandi, H., Jahromi,N.M., Darabi, S.A., &Birjandi, M.,(2014)The Effect of Cost Leadership Strategy On ROA and Future Performance of Accepted Companies in Tehran Stock Exchange. Research Journal of Finance and Accounting, 5, (7),153-158.
Creswell, J. W. (2012). Qualitative inquiry & research design: Choosing among five approaches (4th ed.). Thousand Oaks, CA: Sage.
Day, G. S., & Wensley, R. (1988). Assessing advantage: A framework for diagnosing competitive superiority. Journal of Marketing, 52 (2), 1–20.
Etori, M (2013). Business growth strategies and organization performance in Chase Bank. (Unpublished MBA Thesis) University of Nairobi, Kenya.
Fernando, G. D. Chang, H., & Tripathy, A. (2015), An Empirical Study of Strategic Positioning and Production Efficiency. Advances in Operations Research, 15(2), 1-11.
Harzing, A.W. (2010). An empirical analysis and extension of the Bartlett and Ghoshal typology of multinational companies, Journal of International Business Studies, 31(1), 101-120
Johanna, H. (2010). The meaning of Hotelstar–rating systems, Retrieved From http://www.globalexpresstours.com
Kothari, C.R. (2012). Research Methodology: Methods and Techniques. (3ndEd.).New Age International Publishers, New Delhi.
Kropp, F., Lindsay, N. L., & Shoham, A. (2006). Entrepreneurial, market, and learning orientations and international entrepreneurial business venture performance in South African firms, International Marketing Review, 23(5), 501–523.
Marangu,W. Mwiti,E & Thoronjo, E.(2017). Analysis of Cost Leadership Strategy Influence on Organizations’ Competitiveness of Sugar Firms in Kenya, European Journal of Business and Management, 3(5), 19-27.
Martin, J. H., Martin, B., A., & Minnillo, P. R. (2009). Implementing a market orientation in small manufacturing firms: From cognitive model to action, Journal of Small Business Management, 47(1), 92–116.
Morgan, R. E., Strong, C. A., & McGuinness, T. (2003). Product-market positioning and prospector strategy: An analysis of strategic patterns from the Resource-Based Perspective, European Journal of Marketing, 37(10), 1409–1439.
Munyoki,C. & K’Obonyo, P. (2015). The Role Of Competitive Strategies On Performance Of Kenya State Corporations, International Journal for Innovation Education and Research, 3 (12),65-77.
Perks, S. (2002). The Fifth Discipline: The art and practice of the learning organization, Doubleday, New York.
Pulaj, E., Kume, V., & Cipi, A.(2015). The Impact Of Generic Competitive Strategies On Organizational Performance, The Evidence From Albanian Context. European Scientific Journal, 11(28), 273-284.
The Kenya gazette 13 June, 2003: special issue, vol. CV.NO.62, Gazette notice No.3976, classification of hotels and restaurants, regulation 1988. Published by Government of Kenya.
Thompson, A., Strickland, A., & Gamble, J. (2003). Strategic Management: Concepts and Cases(13th ed.). New York : McGraw Hill.
Valipour, H., Birjandi, H., &Honarbakhsh, S. (2012). The Effects of Cost Leadership Strategy and Product Differentiation Strategy on the Performance of Firms, Journal of Asian Business Strategy, 2(1), 14-23.
Varmah, M. (2012) Competitive Strategies Adopted by Aga Khan University Hospital in Nairobi, Kenya and Challenges Faced in Their Implementation,(Unpublished MBA Thesis), University of Nairobi, Kenya.
Wadongo, B., Odhuno, E., Kambona, O., & Othuon, L.(2010). Key Performance Indicators in Kenyan Hospitality Industry: A managerial perspective, Benchmarking, An International Journal,17(6), 858-875.
Wiklund, J., & Shepherd, D. (2003). Knowledge-based resources, entrepreneurial orientation, and the performance of small and medium sized business, Strategic Management Journal, 24(13), 1307–1314.
DOI: http://dx.doi.org/10.61426/sjbcm.v8i3.2076
Refbacks
- There are currently no refbacks.
This work is licensed under a Creative Commons Attribution 3.0 License.
PAST ISSUES:
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.