Repositioning Strategy and Performance of Selected Large Manufacturing Firms in Nairobi City County, Kenya

Abstract

Globally, manufacturing firms play a fundamental role in a country’s social economic development. Performance of manufacturing firms has not met the expectation of the key stakeholders because of several factors as exhibited by stiff competition leading to low market share, customer dissatisfaction, reduced profitability, environmental uncertainty, poor response rate to market crisis and lack of required raw materials. This study investigated the effect of repositioning strategy on performance of selected large manufacturing firms in Nairobi City County. Specifically, the study sought to determine the effect of network relationships, corporate rebranding and internal processes on performance of selected large manufacturing firms in Nairobi City County. In addition, the study sought to determine the mediating and moderating effects of organisational competence and environmental dynamism respectively on the relationship between repositioning strategy and performance of selected large manufacturing firms in Nairobi City County. Stakeholder theory was the main theory being supported by institutional theory, resource-based view theory, competency theory and strategic choice theory. Positivism philosophy was adopted for the study and descriptive and explanatory research design were used for the study. The target population was 107 large manufacturing firms in Nairobi City County. Four heads of departments from each manufacturing firm (Planning department, operations department, marketing department and finance department) were targeted thus yielding a sample size of 428 respondents. Semi structured questionnaires were used to collect primary data. Validity of the research instrument was tested using face, content and construct validity. Reliability was tested using Cronbach’s alpha (α) coefficient of 0.7 and the overall reliability for the instrument was 0.825 which was considered satisfactory for the study. Descriptive statistics were computed to describe the characteristics of the study variables while multiple linear regression analysis was used to establish the nature and magnitude of the effect of the independent on dependent variables. Quantitative data was presented in form of tables and charts. Qualitative data collected through open ended questions were analyzed using content analysis on the basis of common themes and presented in a narrative form. The study found out that network relationships and internal process control had a significant positive effect on performance of the selected large manufacturing firms in Nairobi City County while corporate rebranding had no significant effect on performance of selected large manufacturing firms in Nairobi City County. Organizational competences had a partial mediating effect on the relationship between repositioning strategy and firm performance of the manufacturing firms in Nairobi City County while environmental dynamism had no significant moderating effect on the relationship between repositioning strategy and firm performance of selected large manufacturing firms in Nairobi City County. The study recommends that the government through Kenya Association of manufacturers should focus on policies that promote networking and collaborations for sustained competitive advantage. The study called on the board of directors of the sampled manufacturing firms and the minister for industrialization to facilitate development of environmental management strategies capable of reducing the effects of environmental turbulence. Future research to investigate the effect of repositioning strategy on firm performance in other regions with different contextual characteristics.