Effect of Differentiation Strategy on the Performance of Manufacturing Firms in Kenya

Rukia Atikiya, Elegwa Mukulu, John M. Kihoro, Esther W. Waiganjo

Abstract


The purpose of this paper is to establish the effect of differentiation strategy on the performance of manufacturing firms in Kenya. The study was anchored on Porter’s competitive business strategy typology. A survey questionnaire and an interview guide was used to collect data from 131 firms out of the 170 targeted drawn from 12 key industrial subsectors located within Nairobi and its environs. The study adopted descriptive and explanatory research design. Pearson’s correlation was used to indicate positive correlation between the input and the output variable and regression analysis was used to test the relationship between the constructs. The study confirms previous studies on positive relationship between differentiation strategy and firm performance. The study adds new knowledge to the literature on strategies adopted by manufacturing firms in a developing country context. The study concludes that manufacturing firms interested in enhancing their performance and staying ahead of competition should pursue differentiation strategy.


Keywords


Differentiation, Strategy, Firm performance, Competitive Strategy, Competition,

Full Text:

PDF

References


• Acquaah M, Yasai-Ardekani M 2008. Does the imple- mentation of a combination competitive strategy yield incremental performance benefits? A new perspective from a transition economy in Sub-Saharan Africa. Journal of Business Research, 61: 346-354.

• Allen, R.S., & Helms, M.M. (2002). Employee perceptions of the relationship between strategy, rewards and organizational performance. Journal of Business Strategies, 19(2) 115-139.

• Allen, R., & Helms, M. (2006). Linking Strategic Practices and Organizational Performance to Porter's Generic Strategies. Business Process Management, 12(4), 433-454.

• Asch, R. and Salaman, E. (2002). The effect of proactive human resource management practices on job retention, International Business Review, Vol.27(6), pp 676-687.

• Baines A, Langfield-Smith K 2003. Antecedents to management accounting change: A structural equitation approach. Accounting Organizations and Society, 28: 657-698.

• Baum, J. R., Locke, E. A., & Smith, K. G. (2001). A multidimensional model of venture growth. Academy of Management Journal, 44(2), 292-303.

• Barney, J. B., & Hesterly, W. (2006). Strategic management and competitive advantage: Concepts and cases. Upper Saddle River, NJ: Pearson Prentice Hall.

• Marques, A., Lisboa, J., Zimmerer, T.W., & Yasin, M.M., 2000. The Effectiveness of strategies employed by dominant firms in the Portuguese crystal glass industry: An Empirical Investigation. European Business Review, 12 (1), 34-40.

• Morshett, D., Swoboda, B., & Schramm-Klein, H. (2006). Competitive Strategy in Retailing-An Investigation of Applicability of Porter Framework for Food Retailers. Journal of Retailing and Consumer Services, 13, 275-287.

• Porter, M. (1980). Competitive Strategy: Techniques for analysing industry and competitors. New York: The Free Press.

• Hellter, T. (2010). Understanding the Human Resource management: Dynamics, Journal of People Managmenet, 34 (4), 22-34.

• Perera, S. G, & Poole M. 1997. Customer-focused manufacturing strategy and the use of operations-based non-financial performance measures: A research note. Accounting, Organizations and Society, 22: 557-572.

• Porter, M. (1985). Competitive Advantage. New York: The Free Press.

• Silva, G., Lisboa, J., & Yasin, M.M. (2000). Effectiveness of business strategies in the Portuguese culture: An empirical investigation. Cross cultural management: An International Journal, 7 (4), 33-40.

• Jácome, R., Lisboa, J. and Yasin, M. (2002), “Time-based differentiation – An old strategic hat or an effective strategic choice: An empirical investigation”, European Business Review , Vol. 14, No. 3, pp. 184-193.

• Yoo, J.W., Lemak, D.J., & Choi, Y. (2006). Principles of management and competitive strategies: using Fayol to implement Porter. Journal of Management History, 12(4), 352-368.

• Mosakowski, E. (1993). A resource-based perspective on the dynamic strategy-performance relationship: an empirical examination of the focus and differentiation strategies inentrepreneurial firms, Journal of Management, 19, 819-839.


Refbacks

  • There are currently no refbacks.


Copyright (c)