Effect of Differentiation Strategy on the Performance of Manufacturing Firms in Kenya
Keywords:
Differentiation, Strategy, Firm performance, Competitive Strategy, Competition,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.
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