INFLUENCE OF COMPETITIVE STRATEGIES ON PERFORMANCE OF LICENSED LOGISTICS COMPANIES IN KENYA

Abstract

Greater competition among logistics firms in Kenya has led to poor performance and eventually collapse of many businesses at a rate of twenty five percent per annum according to the Communications Authority report. This study therefore established the influence of competitive strategies on performance of licensed logistics companies in Kenya focusing on cost leadership strategy, differentiation strategy, innovation strategy and market focus strategy. The study targeted all the 1,472 licensed logistics companies according to the Communications Authority report of December 2019. Yamane formula was used to determine a sample size of 94 firms which were sampled randomly. The sample size of the study was 94 respondents. Quantitative data collected using a questionnaire was analysed through mean, frequencies and percentages. The study also used correlation and regression to achieve the specific objectives. Analysis was conducted using SPSS version 24. The study found that firms that avoided marginal customer accounts and apply tight cost practices were great influence to the performance of licensed logistics companies in Kenya. The study also established that the firm offering distinguished and attractive products and services than other competitors influenced the performance greatly. The company investing in technology to expand access to its services had the also had the most effect. Market focus strategy improved the sales and profit significantly. The study concluded that Cost Leadership Strategy had the greatest influence followed by Market Focus Strategy, then Differentiation Strategy while Service Innovation Strategy had the least influence on the performance of licensed logistics companies in Kenya. The study therefore, recommended that management of licensed logistic firms to highly prioritize strategies formulation in their organizations plan. Further, the management of companies in Kenya should hire highly competent staff to implement the corporate growth strategy to achieve its success since it is the backbone of the other competitive strategies.

Key Words: Performance, Cost Leadership Strategy, Differentiation Strategy, Innovation Strategy and Market Focus Strategy