Sources of competitive advantage for transport savings and credit co-operative societies in the public service vehicle industry: the case of MTN Sacco society ltd

Abstract

A competitive advantage exists when the firm is able to deliver the same benefits as competitors but at a lower cost (cost advantage), or deliver benefits that exceed those of competing products (differentiation advantage). Thus, a competitive advantage enables the firm to create superior value for its customers and superior profits for itself. Transport Savings Cooperative Societies (Transport Saccos) are primarily business entities geared towards the promotion of the welfare and economic interests of their members in the Public Service Vehicles industry. The Transport Saccos have come up to dominate the PSV industry in Kenya today. The objectives of study were to establish the sources of competitive advantage that make the Transport Saccos perform better than competition and the challenges facing them. The study was conducted through a survey on the members of a Transport Sacco: Case of MTN Sacco to establish the sources that are possessed by the Transport Saccos. It also sought to establish the major challenges faced by the Saccos. Data was collected via a questionnaire on 40 members sampled from the Society. The data was then analysed using tables and mean scores.

From the study the researcher found out greatest source of competitiveness was the concentration on core business namely savings and loans scheme. The greatest source of competitive advantage was the low cost of loans accorded to members from the society. It was clear members saved money in the Sacco in order to use the same to guarantee them to borrow from the society. The greatest challenge in the transport sector remained tackling corruption by the police force.

Management and members of the Sacco should recognize the competitive advantages enjoyed by the Sacco and work on sustaining the standards in order to continue being perceived as the best transport service providers. They should invest in means of improving the savings and loans product range and timely disbursements of funds through modern technology such as Automated Teller Machines (ATM) and Electronic Funds Transfer (EFT). They should also work on some challenges mainly a policy ion how to deal with rampant corruption by the police force. The government should explore possibility of introducing self regulation in the sector.