Effect of Competitive Advantage Strategies on Performance of Supermarkets in Kenya

Abstract

The guidance of the study was in determining the effects of competitive strategies on the performance of supermarkets specifically in the entire of Kenya. Specifically, in examining the influence of focus strategy, cost leadership and differentiation strategy on the performance of the supermarkets. The Market-Based View and the Porter Five Forces Model were the theoretical anchor of the study. Online generated tool was used in obtaining the data from the respondents by use of crossectional design. Census sampling strategy guided the study where all respondents were legible. Email was sent to the supermarket management and follow-up was done through telephone call. SPSS version 26 was utilized for data analysis. The study achieved a high response rate of 71.6%, with 73 out of 102 targeted respondents. Pretesting was conducted in the branch stores of the randomly picked sample. The sampled branch was omitted from the data collection. The proposed constructs' reliability was examined using Cronbach's Alpha. Focus strategy correlated 0.818, cost leadership (0.963), differentiation strategy (0.823) cost leadership strategy (0.823) on organization performance. All of the study's constructs had Cronbach's Alpha values over 0.70, suggesting their dependability. A Kaiser-Meyer-Olkin index of 0.776 was achieved, thus making it a sufficient sample size. However, a p-value of .000 (less than 0.05) was found for Bartlett's test of sphericity. Professionals in the field of strategic management and supervisor were consulted for validity testing. No autocorrelation (Durbin-Watson) or multicollinearity (Variation Inflation Factors) was found during diagnostic testing. Normality (in terms of skewness and kurtosis) was also discovered. The variable results were focus strategy (β=.280 and p=.013); cost leadership strategy (β=.184 and p=.002) and differentiation strategy (β=.429 and p=.000). The focus strategy demonstrates a substantial effect, as a one-unit increase leads to a significant 0.280 unit rise in performance. This finding highlights the importance of targeting specific customer segments or market niches to enhance performance. Cost leadership strategy exhibits a relatively smaller impact, with a one-unit increase resulting in a modest 0.184 unit increase in performance. While cost reduction and competitive pricing are valuable, they appear to have a more limited effect than the focus strategy. The differentiation strategy, however, emerges as a strong driver of organizational performance, as a one-unit increase leads to a substantial 0.429-unit increase. This suggests that offering unique and distinctive products or services significantly enhances performance in the Kenyan supermarket sector. The study recommended that Researchers employ a mixed-methods strategy combining quantitative analysis with qualitative techniques. With the increasing digitalization of the retail sector, it would be valuable to explore the impact of digital transformation correlation on competitive advantage strategies to the performance of supermarket. Given the growing importance of sustainability and social responsibility in the business landscape, further research can examine the influence of these factors regarding the correlation between strategic competitive approaches and the performance of supermarkets.