Cost Leadership Strategy and Performance of Food and Beverages Manufacturing Firms in Mombasa County, Kenya
Abdala, Khadija Abdulaziz
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Organizations all over the world are operating in very dynamic and unclear circumstances where competitiveness is unavoidable. Thus, firms that wish to still be a head of competitors ought to get proper strategies. It has been noted that firm performance and growth is directly influenced by business strategies. This study aims at establishing how cost leadership influences performance of manufacturing firms in Mombasa County with the following objectives guiding the study; to establish the influence of pricing strategy on performance of manufacturing firms in Mombasa County, to evaluate the influence of operation strategy on performance of manufacturing firms in Mombasa County and to investigate the influence of vertical integration in enhancing market share of manufacturing firms in Mombasa County. The weber-fechner law, resource-based view, lifecycle theory and capability-based theory informed the study. A descriptive research design was adopted with a target population of 5.368 top managers in the department of strategic management, operations management, procurement and finance department in the manufacturing firms in Mombasa County. A sample size of 372 respondents was deployed. The study utilized primary which was gathered by use of structured questionnaires and secondary data. Statistical Package for Social Sciences was used in data analysis using descriptive and inferential statistics. Descriptive statistics included standard deviation, mean, percentage and frequency, whereas inferential statistics comprised of correlation analysis and regression analysis. The results were displayed using bar charts, graphs and tables. A multiple regression model was utilized in demonstrating how the variables relate. The study found that pricing strategy, operation strategy and vertical integration significantly and positively influenced the performance of food and beverage manufacturing firms in Mombasa County, Kenya. The study concludes that pricing strategy enables the organization in controlling the competition by preventing customer and market share loss to the competitors. Operations strategy has a long-run regard on the organization’s operation resources are determined and developed for them to be highly compatible with the business strategy and that vertical integration allows an organization to acquire a new brand and geographically expand through addition distribution centers in new places. The study recommended that the organization should design different pricing strategies, such as creating personalized offers for its loyal customers. The operations strategy of the firm ought to be conducive for development of policies in infrastructure design and process choice in terms systems, procedures and controls which are in line with identified competency of the firm. The organization can choose to carry out backward integration to control cost, maintain quality and mitigate against market vulnerabilities maintain quality and control cost which is the decision of owning the product distribution logistics further down the supply chain and be able to ascertain whether the firm need a middleman to be successful.