COMPETITIVE STRATEGIES AND PERFORMANCE OF FAMILY OWNED SUPERMARKETS IN MACHAKOS COUNTY, KENYA
Charles Kyalo Mutinda - Master of Business Administration (Strategic Management), Kenyatta University, Kenya
Dr. Evans Mwasiaji - Department of Business Administration, Kenyatta University, Kenya
ABSTRACT
Given that the intensity of competition in the supermarkets is increasing and the nature of this competition changing, it is important for all stakeholders to gain knowledge on how best to employ competitive strategies within it in a bid to improve the performance and survival of their firms. In Machakos most supermarkets are family owned majority of which have collapsed due to losses and as a result of the battle for control of the retail market from established supermarkets. This continues to cause anxiety and lost confidence amongst lenders and suppliers in the industry given the loss of revenue, job opportunities and market for suppliers occasioned by the problems in. The issue of performance and problems facing supermarkets acquisition include lack of implementation of competitive strategies. The study sought to establish the influence of competitive strategies on the performance of supermarkets in Machakos County, Kenya. The specific objectives were to determine the effect of cost leadership strategy, differentiation strategy and focus strategy on performance of supermarkets in Machakos County, Kenya. The study was anchored on the following three theories which include Porter’s Generic Strategies Model, Resource-Based View Theory and Resource Dependence Theory. Empirical literature reviewed scholarly studies on the porter’s generic competitive strategies which include cost leadership strategy, differentiation strategy and focus strategy and their influence on performance of Supermarkets. The study used a descriptive research design. The population of study was family owned supermarkets in the in Machakos County that were operational. This consisted of 250 respondents who were the employees of the supermarkets. A sample of 75 respondents was taken which formed 30% of the target population which was evenly spread across the sub-counties. The primary data was collected by use of self-administered semi-structured questionnaire. Data analysis was done by use of descriptive statistics such as frequencies, percentages, mean scores and standard deviation with the aid of SPSS and presented through tables, charts, graphs, frequencies and percentages. Coefficient of correlation was 0.861 an indication of strong positive correlation between the variables. The adjusted coefficient of determination was 0.728 which translates 72.8%. The residual was 27.2% and would be explained by other factors beyond the scope of the current study. The study concludes that cost leadership strategy positively influenced performance of family-based supermarkets in Machakos County. Respondents were in agreement that supermarkets had improved deliveries on accessibility for customers. Differentiation strategy significantly influenced performance of family-based supermarkets in Machakos County. Supermarkets had extended market coverage to new areas and adopted IT. Supermarkets had tailored products to suit specific requirements of the clients and introduced new products to the market. Focus strategy positively influenced performance of family-based supermarkets. Machakos County family-based supermarkets came up with product range to cater for all clients’ categories. The study recommends that family-based supermarkets ought to reduce cost of production and improve deliveries on accessibility for customers. Machakos County supermarkets ought to adopt marketing strategy such as offers and promotions to clients. Operational costs and consumer prices ought to be reduced by the supermarkets. Supermarkets ought to improve products to its customers, adopt technology usage and extend market coverage to new areas. Supermarkets ought to rebrand and review their services for market recognition and outweigh their competitors. Supermarkets ought to extend to locations where majority of clients comes from and come up with new products range to cater for all clients’ categories. Supermarkets ought to advance in customer services for increased accountability.
