Competitive Strategy and Organizational Performance of Selected Savings and Credit Cooperative Societies in Nairobi City County, Kenya
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Date
2025-11
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Kenyatta University
Abstract
Savings and Credit Cooperative societies are essential to reducing poverty, boosting wealth creation, providing a foundation for credit services, and laying the groundwork for Kenya and her overall development. However, they have been faced with declining performance, mostly as a result of weak governance and financial mismanagement, characterized by low market share, inability to satisfy customers and low employee productivity. This investigation was developed to analyze the effect of competitive strategy on the performance of the chosen Savings and Credit Cooperative Societies (SACCOs) within Nairobi City County in Kenya. It was particularly concerned with the strategy of leadership, differentiation, focus and benchmarking. It was based on the Balanced Scorecard, Diffusion of Innovation, Porters generic competitive strategies and the Resource based View on which the research was based. The target population was a population of forty-nine Nairobi County SACCOs registered in the Regulatory Authority of Savings and Credit Cooperatives. The research involved the recruitment of 147 respondents and a descriptive research design was used. A census was conducted on all 147 respondents and one manager in each of the 49 organisations was taken to provide data in the operations, finance, administration, and human resource division of the organisation. Primary data were obtained through a questionnaire that had open ended questions and closed ended questions. The reliability was evaluated using Cronbachs Alpha, with the value of 0.70. Table and graphs were used to present the results of the data analysis using descriptive statistics and inferential statistics, including means, standard deviations and multiple regression. The researcher was able to maintain confidentiality in the research. Regression analysis revealed that the cost leadership, cost to income ratio had a positive statistically significant effect on organisational performance. The differentiation strategy which was measured through the adoption of new products affected it negatively but not significantly. Focus strategy, which was evaluated on the basis of membership growth in the niche and uptake of loans, positively and significantly influenced performance. The performance of the cooperatives was also positively and significantly influenced by benchmarking strategy, the measurement of which was net promoter score and member retention rate. The study recommends that Savings and Credit Cooperative Societies should diversify their strategic focus beyond cost leadership and differentiation given their insignificant influence on Organizational performance. They should explore and implement other competitive strategies that are focus, or benchmarking, which have shown more promise in enhancing organizational performance. By shifting their strategic emphasis towards these alternative approaches, Savings and Credit Cooperative Societies can potentially improve their operational efficiency and competitiveness in the market. The study is meant to benefit policy makers, management of Savings and Credit Cooperative Societies, Sacco Society Regulatory Authority, government, academicians and researchers. The findings are additional literature to existing body of knowledge. Further studies should concentrate on establishing reasons as to why differentiation and cost leadership strategies had no significant influence on the performance of cooperatives.
Description
A Research Project Submitted to School of Business, Economics and Tourism in Partial Fulfillment of the Requirement for the Award of Degree of Master of Business Administration (Strategic Management Option) of Kenyatta University. November, 2025
supervisor
Kipkorir Sitienei C. S