PORTER’S COMPETITIVE STRATEGIES AND PERFORMANCE OF PUBLIC CORPORATIONS IN NAIROBI CITY COUNTY, KENYA

Abstract

Organizations adopt various strategies to create competitive advantage and improve performance. Public corporations in Kenya operate in changed environmental conditions. To survive and succeed in the increasingly competitive environment, the corporations are adopting various strategies. This paper examined the effect of Porter’s competitive strategies on performance of public corporations in Nairobi City County, Kenya. This study was guided by the theory of generic competitive strategies. The study adopted an explanatory research design. The target population for this study was 133 public corporations in Nairobi City County. A sample of 99 public corporations was used. Primary data was obtained using self-administered questionnaires. Descriptive statistics such as frequencies, percentages, mean score and standard deviation were used to summarize data. Multiple regression analysis was used to test the research hypothesis. The study established that the Public Corporations to a great extent adopted differentiation strategy, low-cost leadership strategy and focus strategy. The study revealed that the three strategies had a positive effect on the performance of the firms. The study concluded that low-cost leadership strategy had the greatest effect on the performance followed by focus strategy while differentiation strategy had the least effect on performance. The study recommends adoption of the competitive strategies to enhance performance of the public corporations. The study further recommends that public corporations should continue investing and coming up with unique services so that they can differentiate themselves. The corporations may at the same time continue innovating services which will compete with other companies and do aggressive marketing in order to change the perception which the customers have regarding the pricing in order to capture a larger market.

Keywords: Low-cost leadership strategy, Differentiation strategy, Focus strategy, performance.