INFLUENCE OF INDUSTRY CHARACTERISTICS ON COMPETITIVE ADVANTAGE OF DEPOSIT TAKING SACCOs IN NAIROBI, KENYA

Authors

  • Rosemary Karanja Master’s Student, School of Business and Entrepreneurship, Jomo Kenyatta University of Agriculture and Technology, Kenya
  • Paul Kariuki Lecturer, School of Business and Entrepreneurship, Jomo Kenyatta University of Agriculture and Technology, Kenya

Abstract

The main objective of the study was to establish the influence of industry characteristics on the competitive advantage of Deposit Taking Savings and Credit Cooperative Organisations (DT-SACCOs) in Nairobi County, using Michael Porter’s industry forces namely industry rivalry, customers bargaining power, suppliers bargaining power and barriers to entry. The study adopted a descriptive research design targeting all the 44 DT-SACCOs in Nairobi County licensed by the Savings and Credit Cooperative Organisations (SACCO) Societies Regulatory Authority (SASRA) in 2019. Quantitative data collected through structured questionnaires was used whereby descriptive statistics, correlation and regression analysis was conducted. The findings indicated that customers bargaining power was high among customers who patronized large volumes of credit. In addition, suppliers whose inputs were differentiated were found to have high bargaining power leaving DT-SACCOs with limited options to switch to another supplier to the extent of affecting performance because of high running costs while keeping a keen eye on their brand value and customer loyalty.  The study also found that barriers such as start-up capital, government regulations and policy on minimum requirements for business licensing hindered new entrants while existing firms continued to enjoy brand value and customer loyalty. The study concluded that industry rivalry influenced competitive advantage of DT-SACCOs when the industry was highly concentrated, and growth was slow. Customers bargaining power influenced competitive advantage of DT-SACCOs among customers patronizing large volumes of credit and those with ease of access to information giving them ability to force down prices. Suppliers bargaining power had influence on competitive advantage of DT-SACCOs when the inputs were differentiated. Barriers to entry influenced competitive advantage of DT-SACCOs with start-up capital, government regulations and policy hindering new entrants and compliance being seen as a competitive edge for the existing businesses in enhancing their brand value.

Keywords: Industry characteristics, competitive advantage, Deposit taking SACCOs

Downloads

Download data is not yet available.

Downloads

Published

2021-10-03

How to Cite

INFLUENCE OF INDUSTRY CHARACTERISTICS ON COMPETITIVE ADVANTAGE OF DEPOSIT TAKING SACCOs IN NAIROBI, KENYA. (2021). Journal of International Business, Innovation and Strategic Management, 5(2), 117-130. https://jibism.org/core_files/index.php/JIBISM/article/view/155

Most read articles by the same author(s)