The Mediating Effect of Competitive Advantage on the Relationship between Corporate Strategies and Performance of Manufacturing Firms in Nairobi City County, Kenya

Abstract

Competitive advantage is often described as the strategic abilities in possession of the firm, generated from its unique combination of resources and attributes to emerge ahead of competitors in the industry. There are different strategic tools and models used to achieve competitive advantage. This paper examines the mediating effect of competitive advantage on the relationship between corporate strategies and performance of manufacturing firms in Nairobi City County, Kenya; which is a developing economy within Sub-Saharan Africa. The authors adopted indicators of innovation, value chain integration and market leadership to measure competitive advantage. The sample size was 189 large manufacturing firms located in Nairobi City County where 80% of the country’s manufacturing firms are situated. The study used semi-structured questionnaire to collect primary data, which was analysed using descriptive and inferential statistics. The study findings indicate that competitive advantage has a mediating effect on the relationship between corporate strategies and firm performance.