Effect of Competitive Strategies on Customer Loyalty among Retail Business in Garissa Town, Kenya
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Date
2017-04
Authors
Abdikadir, Abdi Farah
Journal Title
Journal ISSN
Volume Title
Publisher
Kenyatta University
Abstract
This study aimed at analyzing the effect of competitive strategy and customer loyalty
among retail business in Garissa Town. Under this objective, the study intended to
examine the extent to which cost leadership strategy affects customer loyalty; to find
out how the focus strategy influences customer interest; to assess the effect of
differentiation strategy in retail business. The findings of this study will help the
organisations to understand the relationship between the competitive strategies and
customer loyalty. The study objectives included; determining the effects of cost
leadership strategies on customer loyalty in retail business; to establish how focus
strategy affects customer loyalty in retail business; to establish the differentiations
strategies used by businesses to enhance customer loyalty in retail business in Garissa
town. The study used descriptive research design in the collection of data. The target
population was drawn from four hundred and fifty retail business in Garissa town.
Through Stratified proportionate random Sampling technique a total of one hundred
and thirty five respondents was obtained. This study concluded that cost leadership
strategy, requires a continuous search for cost reductions in all aspects of the business.
Differentiation is a viable strategy for earning above average returns in a specific
business because the resulting brand loyalty lowers customers’ sensitivity to price.
Differentiation creates a better entry barrier. Retail business in Garissa town use focus
strategy on a particular buyer group, product segment, or geographical market. Focus
strategy means achieving either a low cost advantage or differentiation in a narrow
part of the market. This has creates a defendable position within that part of the
market of retail business in Garissa town. The study recommended that retail business
in Garissa town should ensure continued capital investment to maintain cost
advantage through economies of scale and market share. Develop cheaper ways to
produce existing products. Increase capital investment in new technology, which can
lead to large market share in the long-run. achieving a successful strategy of
differentiation usually requires strong marketing skills, Product innovation as opposed
to process innovation, research and development, customer support, less emphasis on
incentive based pay structure etc. Retail business in Garissa town can also do
differentiation of their products through different design, brand image, number of
features, new technology etc. Retail business in Garissa town should embrace a focus
strategy in order to gain a competitive advantage by aiming at attending to specific
small niches that require special features or prices. The retail business in Garissa town
should use a focus strategy by selecting a segment or a group of segments within the
industry for which a strategy is tailored and also have different segments in which it
can focus on or represent the impossibility to go to the broader perspective, because
these are facts creating tradeoffs and so barriers to imitation.
Description
A Research Project Submitted to the School of Business in Partial Fulfillment of the Requirement for the Award of the Degree of Master of Business Administration of
Kenyatta University