Niche Strategy and Firm Performance of Bamburi Special Products Limited in Kenya

Abstract

Niche strategy has in recent years become a common, profitable business approach applied by business firms world-over, for its benefits like avoiding direct competition with larger competitors, where a firm identifies profitable niches with unmet needs, or even for survival. While the construction industry in Kenya has been performing well in the last 10 years, one industry niche, commercial concrete manufacturing, has not. Niche strategy is often viewed as a function level strategy, however this study aimed to ascertain its effects, where applied as a corporate level strategy, on firm performance of Bamburi Special Products Limited, a commercial concrete manufacturing niche company in Kenya. The specific objectives of the study were to establish the effects of segmentation strategy, differentiation strategy and positioning strategy on firm performance. The study benefits policy makers focused on developing policies for the concrete manufacturing sector in Kenya, scholars and management practitioners. The study employed descriptive research design based on case study approach. Population of the study was management team at Bamburi Special Products Limited, and the sample size was 53 management and supervisory employees of the company. The study made use of primary data. A semi-structured questionnaire was applied to collect primary data, with a pilot test done to augment the research instrument’s validity, also increasing the research reliability. Collected data was analyzed using descriptive methods including standard deviation and means, and presented using graphs and tables. A simple regression analysis was done to show the relationship between the dependent and independent variables. The study found segmentation strategy, differentiation strategy and positioning strategy to all have a positive and significant influence on firm performance. The study further established that differentiation strategy had the greatest influence on firm performance, followed by segmentation strategy and lastly positioning strategy. The study recommends for the company’s correct application of the niche strategy to maximize on the positive benefits of the strategy, and Kenya government support with developing policies to tackle existing challenges in the construction industry. Recommendation is also made for further study of niche strategy as a corporate level strategy, and addressing other concrete manufacturing companies in Kenya to facilitate comparison and generalization of the research findings.