EFFECT OF CORPORATE STRATEGY ON PERFORMANCE OF RETIREMENT BENEFIT FUND: A CASE OF LIBERTY LIFE ASSURANCE (K) LTD
Bernard Kinyanjui Karanja - Master of Business Administration, Jomo Kenyatta University of Agriculture and Technology, Kenya
Dr. Susan Were - Jomo Kenyatta University of Agriculture and Technology, Kenya
ABSTRACT
Corporate strategy is concerned with both the functioning of the organization and the distribution of power between different stakeholders. Corporate executives are therefore concerned with the orientation towards growth, coordination of cash flow among business units and building of corporate synergies through resource sharing and development. Literature on the effect of corporate strategies has reveals mixed findings. The introduction of Retirement Benefits Authority (RBA) in 2012 and the governing Regulations 2009 revolutionized the manner in which the retirement benefits business in Kenya is carried out. The industry has been registering high numbers of new entrants. As competition intensifies in the industry, only those providers with good competitive strategies survive. Liberty Life Assurance (K) Ltd face the challenges of stiff competition from an upsurge in the number of retirement benefit scheme fund players. This is coupled by the dwindling performance heralded by lack of appropriate investment vehicles and market liquidity knowledge and also expertise about these investments and their associated risks. This study sought to explore the effects of corporate strategies on the performance of retirement benefit funds in Kenya at Liberty Life Assurance (K) Ltd. The study adopted a descriptive research design, the target population for this study was management staff of the Liberty Life Assurance (K) Ltd. Stratified proportionate random sampling technique was be used to select the respondents. Primary data was obtained using self-administered questionnaires. The questionnaire is made up of both open ended and closed ended questions. Mixed methods data analysis techniques that were employed in this study incorporated both descriptive and inferential data analysis. Non-parametric data were analyzed descriptively by use of measures of central tendency and measures of dispersion as the tools of data analysis. For the parametric data, Pearson’s Product Moment Correlation Coefficient (r) was used. A multiple regression analysis was computed for all the study variables to determine whether the independent variables together predict the dependent variable. Analysis of Variance (ANOVA) was also done to establish whether the whole model was significant fit of the data and therefore form the tests of significance. Quantitative data was presented using frequency tables and figures. Qualitative data were derived from the open-ended questions in the questionnaire and were presented in prose form. The findings identified that cost leadership affect performance retirement benefit funds in Kenya to a very great extent. According to the findings of the study, product innovation affects performance retirement benefit funds in Kenya to a great extent. Market focus was found to have great effects on performance retirement benefit funds in Kenya. The results from findings further shows that customer differentiation affects performance of retirement benefit fund in Kenya to a very great extent. The study established that product differentiation affect performance retirement benefit funds in Kenya to a very great extent. According to the findings of the study conclude that product differentiation strategy had the greatest effect on the on the performance of retirement benefit fund, followed by cost leadership, and then product innovation while market focus strategy had the least effect on performance of retirement benefit funds in Kenya. The study recommends that Retirement Benefit Fund should aim at achieving above-average returns over competitors and also improves its performance through monitoring the costs of activities provided and maintaining low charges on services offered. In relation to market focus the Retirement Benefit Fund should create marketing departments. Such departments need to be strengthened by employing people with the needed skills, knowledge and experience in marketing related functions.There is also the need to introduce new products on an incremental basis.
