Influence of Competitive Strategies on Firm Performance of Export Processing Zone Industries in Kenya

Abstract

This study assessed the influence of competitive strategies on firm performance in textile industry in Kenya. The specific objectives of the study was to examine the influence of cost leadership strategies, focus strategies and differentiation strategies on firm performance in textile industry in Kenya. These theories informing the study were Porter's Generic Competitive Strategies, Capability Based Theory and Resource Based View Theory. The target population of the study was the 15 EPZ companies in Nairobi County. Data was collected by administering a semi structured questionnaire. Descriptive research design was adopted because the study sought to describe one variable in a population at the selected EPZ companies. The study used human resource, sales and operations departments. In order to check reliability of the results, study used Cronbach's alpha methodology, which was based on internal consistency of values more than 0.7. Quantitative data collected was analyzed by the use of descriptive statistics using SPSS and presented through percentages, means, standard deviations, frequencies, Anova and the information was displayed by use of bar charts, graphs, pie charts, inferential statistics and regression analysis. The regression of coefficients results indicated that cost leadership strategy and firm performance were positively and significantly related (B=0.103, p=0.013). The results further indicated that focus strategy and firm performance were positively and significantly related (B= 0.129, p=0.001). Lastly, results showed that differentiation strategy and firm performance were positively and significant (B =0.0.078, p=0.043). The study concluded that competitive strategies played a significant role on firm performance in textile industry in Kenya. This is because there existed a positive and significant relationship between cost leadership strategy, focus strategy and differentiation strategy on firm performance in textile EPZ companies in Nairobi County. The study recommended that the textile organizations should focus on adopting competitive strategies so as to improve organizational performance through increasing customer base, asset quality, quality of service and increased market share.

Keywords: Competitive Strategies, Cost Leadership Strategy, Focus Strategy, Differentiation Strategy, Firm Performance, Export Processing Zone (EPZ) & Kenya.