Differentiation strategies and organizational performance of firms listed under manufacturing and allied sector at the Nairobi securities exchange
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Date
2023-11
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Kenyatta University
Abstract
Growth in Kenya, like that of many other developing nations, has been driven mostly by the agricultural and services industries, rather than the industrial sector. The fall in manufacturing's share of GDP to 8.4% in 2017 and 9.2% in 2016 is evidence that the nation has undergone premature deindustrialization. Kenya's industrial and associated sectors have overcome several obstacles and are now flourishing. Each business is desperately trying to distinguish itself from the others; therefore, they have introduced novel methods, developed innovative products, engaged in pricing wars, and opened up new distribution channels. The study's main objective was to ascertain whether companies trading on the NSE that operate in the industrial and allied sector may profit from using differentiation strategies. This study aimed to evaluate the effects of product, service, and channel differentiation on the bottom lines of industrial and allied sector companies listed on the NSE. The knowledge-based theory, Porter's generic strategy model, the discrete-choice theory of product differentiation, and the theory of hedonic pricing served as theoretical anchors for this investigation. Using a descriptive research strategy, this study investigated the research topic at hand. Twenty-five managers or supervisors and workers from each of the eight industrial and allied Sector enterprises situated in Nairobi County were surveyed for this study. Yamane's method was used to calculate a sample size of 133 for this investigation from a population of 200, with a 95% confidence interval. The researcher utilized the questionnaire to gather primary data from the institution's management. Descriptive statistics, including percentages, were used to facilitate the transformation of raw data into a format conducive to comprehension and interpretation in alignment with the objectives of the study. Inferential statistics, such as linear regressions, was also used to examine the quantitative data. In this study, an alpha value of 0.7 or above was considered as indicative of a reliable research instrument. In addition, a pilot study was conducted to assess the research instrument and establish the clarity of the questions posed so that any problems were addressed. Graphs and tables were used to display numerical data, with accompanying textual explanations. The study results show that most of the respondents agreed that product differentiation impacts on performance of firms listed under industrial and allied sector at the NSE. The study findings show that product differentiation has a positive statistical beta coefficient. The study findings indicate that majority of the respondents agreed that service differentiation impacts on performance of firms listed under industrial and allied sector at the NSE. Service differentiation has a positive statistical beta coefficient. The results show that most of the respondents were in agreement that channel differentiation impacts on performance of firms listed under industrial and allied sector at the NSE. Channel differentiation has a positive statistical beta. The study results indicate that majority of the respondents agreed that price differentiation affects performance of firms listed under industrial and allied sector at the NSE. Price differentiation has a positive statistical beta coefficient. The study recommends that the firms should consider costs in their production, outsource production to minimize costs and adopt the mechanization method to enhance efficiency in production. It was recommended that the firms consider costs and market conditions when pricing their products in order to improve performance and that that firms should use different distribution channels so that they could reach customers in different areas and improve their performance. The study recommends that the firms broaden their product offering, obtain certification for their products, and adopt innovation.
Description
A research project to the school of business, economics and Tourism in partial fulfillment of the requirement for the Award of the degree of master of business (strategic Management) Kenyatta University, November 2023
Supervisor David Kiiru