PORTER'S GENERIC STRATEGIES AND FIRM PERFORMANCE IN PETROLEUM MARKETING COMPANIES: A CASE STUDY OF VIVO ENERGY, NAIROBI, KENYA

2021 ◽  
pp. 98-112
Author(s):  
Novah Omboga ◽  
Paul Machoka
Keyword(s):  
Firm Performance ◽  
Competitive Advantage ◽  
Cost Leadership ◽  
Leadership Strategy ◽  
Focus Strategy ◽  
Generic Strategies ◽  
The Relationship ◽  
Porter's Generic Strategies ◽  
Cost Leadership Strategy

ABSTRACT The main objective of the study was to establish the influence of Porter's generic strategies and firm performance in petroleum marketing companies using Vivo Energy Limited as a case study. The business environment in emerging economies has witnessed intense competition among firms. Petroleum marketing companies in Kenya have had to face such conditions in a competitive environment prompting the firms to develop strategies that match their capabilities to market demands. The specific objectives of the study were: to examine how leadership cost strategy and; focus strategy affect the firm performance of Vivo Energy Limited. The study was premised on the; resource-based view, competitive advantage and contingency theories. This study adopted a descriptive research design. The target population was 237 employees at Vivo Energy Limited. Stratified proportion sampling was used to obtain a sample of 108 respondents. Questionnaires were used for data collection. Data was analyzed using descriptive and inferential statistics to determine the relationship between the study variables. Pearson correlation analysis was carried out to establish the relationship between dependent and independent variables. The analysis of variance (ANOVA) was checked to reveal the overall model significance. The study established that there was a positive relationship between the cost leadership strategy and firm performance. Analysis also revealed that focus strategy had a substantial positive correlation, establishing that focus strategy and firm performance are fundamentally related, and that the variation in firm performance can be explained by a unit change in focus strategy. The study recommended that the management of Vivo Energy Limited should adopt cost leadership strategy that is focused on gaining competitive advantage byselling their products at average prices to earn higher profits than competitors in the sector or below the average industry prices to gain market share. It also recommends that Vivo Energy should consider employing focus strategies that are concentrated on narrow segment aimed at achieving cost advantage or differentiation. Keyword: Cost leadership, Firm Performance, Focus strategy, Generic Strategies

scholarly journals Porter's Generic Strategies: An Exploratory Study of Their Use In Japan

1970 ◽  
Vol 24 (1) ◽  
pp. 69-90
Author(s):  
Richard Allen ◽  
Marilyn Helms ◽  
Margaret Takeda ◽  
Charles White
Keyword(s):  
Exploratory Study ◽  
Cost Leadership ◽  
Differentiation Strategy ◽  
Japanese Firms ◽  
Leadership Strategy ◽  
Japanese Companies ◽  
Focus Strategy ◽  
Generic Strategies ◽  
Porter's Generic Strategies ◽  
Cost Leadership Strategy

While the use of Porter's generic strategies have been well documented inAmerica and Europe, no studies have assessed their use in Japan. This researchinvestigates if Japanese companies are indeed following Porter's genericstrategies or continuing to follow more traditional "Japanese" managementstrategies. Using a survey to operationalize Porter's generic strategies, Japanesemanagers were questioned about their firm's current strategic practices. Afactor analysis revealed Japanese firms are following only two strategies thatcould be identified as those of Porter. A cost leadership strategy was the mostfrequently used strategy, and the differentiation strategy was used the least.There was no evidence of organizations using a focus strategy. Interestingly,two additional strategies emerged that did not fit Porter's research but are inline with traditional Japanese strategies including a supply chain focus and atraining based strategy.

scholarly journals COST LEADERSHIP STRATEGY, COMPETITIVE ADVANTAGE, AND PERFORMANCE: A CROSS-SECTIONAL STUDY IN THE CONTEXT OF MILK PROCESSING FIRMS IN KENYA

2020 ◽  
Vol 6 (2) ◽  
pp. 64-76
Author(s):  
Paul G. Kimiti ◽  
Stephen M. A. Muathe ◽  
Elishiba M. Murigi
Keyword(s):  
Competitive Advantage ◽  
Economies Of Scale ◽  
Scale Economies ◽  
Economies Of Scope ◽  
Cost Leadership ◽  
Milk Processing ◽  
Leadership Strategy ◽  
And Performance ◽  
The Relationship ◽  
Cost Leadership Strategy

Purpose of the study: Cost leadership strategy is driven by economies of scale, economies of scope, and operational efficiency is a remedy to a performance where firms are facing high costs. This study sought to investigate the influence of cost leadership strategy on the performance of milk processing firms in Kenya through the lens of competitive advantage as a mediator. Methodology: The study adopted descriptive and explanatory non-experimental research designs. It was a census of all 29 milk processing firms registered with Kenya Dairy Board as of June 2019. Sampling was done using proportionate stratified random sampling technique and data was collected using self-administered semi-structured questionnaires. The analysis was done using means, standard deviations, and regression. Main Findings: The findings showed that a cost leadership strategy had a positive and significant effect on the performance of milk processing firms in Kenya with a competitive advantage partially mediating the relationship. The constituent measures of cost leadership strategy namely economies of scale, economies of scope, and operational efficiency accounted for 40.1% of the variation in firm performance. Applications of this study: This study provides suggestions for firms to manage costs and therefore improve performance. This is by increasing the size of operations, expanding into related business areas, and improving operational processes. Novelty/originality of this study: The study examines the influence of cost leadership strategy in a new context of milk processing firms in Kenya. It also incorporates a competitive advantage as a significant variable affecting the relationship between costs and performance.  

Insights Between Environmental Scanning Activities and Porter's Generic Strategies: An Empirical Analysis

1992 ◽  
Vol 18 (4) ◽  
pp. 791-803 ◽  
Author(s):  
Daniel F. Jennings ◽  
James R. Lumpkin
Keyword(s):  
Environmental Scanning ◽  
Chief Executives ◽  
Cost Leadership ◽  
Differentiation Strategy ◽  
Leadership Strategy ◽  
Different Types ◽  
Customer Attitudes ◽  
Generic Strategies ◽  
Porter's Generic Strategies ◽  
Cost Leadership Strategy

This study explored the relationships between the environmental scanning activities of chief executives from a single industry and their organizations' strategies, on the premise that executives employing different types of Porter's generic business-level strategies would use different scanning activities. There were differences in the strategy-scanning linkages. Specifically there are indications that firms with a differentiation strategy tend to employ a scanning activity that places more importance on evaluating opportunities and customer attitudes. Firms with a cost leadership strategy tend to use a scanning activity that evaluates competitive threats and tracks the policies and tactics of competitors.

scholarly journals ANALISIS VALUE CHAIN DALAM UPAYA PENINGKATAN COMPETITIVE ADVANTAGE

2020 ◽  
Vol 27 (2) ◽  
pp. 238
Author(s):  
Ratna Christiana Dewi
Keyword(s):  
Competitive Advantage ◽  
Value Chain ◽  
Value Chain Analysis ◽  
Cost Leadership ◽  
Analysis Process ◽  
Leadership Strategy ◽  
Chain Analysis ◽  
The Cost ◽  
Cost Leadership Strategy

Introduction: This study aims to identify primary activities in the value chain analysis process to increase competitive advantage (competitive advantage) in order to support the cost leadership strategy of East Java Youth Lodging in order to survive and win with other tourist lodges and inns in Surabaya.Methods: This research uses a qualitative approach with the method chosen is a case study, while the type of this research is exploratory research.Results: The result of this research is that East Java Youth Lodging still has the opportunity to develop and compete in facing business threats because the Youth Lodging currently has a cost leadership strategy. East Java Youth Lodging as one of the accommodation services that offers cheaper prices with services and facilities that are no less than tourist lodges and other inns in Surabaya.Conclusion: Through the indication of primary activities with the value chain analysis process identified cost drivers that create opportunities for cost reduction, especially in logistics, so that the reduction in costs can be used as an increase in competitive advantage for East Java Youth Lodging.

scholarly journals ANALISIS VALUE CHAIN DALAM UPAYA PENINGKATAN COMPETITIVE ADVANTAGE

2020 ◽  
Vol 27 (2) ◽  
pp. 238
Author(s):  
Ratna Christiana Dewi
Keyword(s):  
Competitive Advantage ◽  
Value Chain ◽  
Value Chain Analysis ◽  
Cost Leadership ◽  
Analysis Process ◽  
Leadership Strategy ◽  
Chain Analysis ◽  
The Cost ◽  
Cost Leadership Strategy

Introduction: This study aims to identify primary activities in the value chain analysis process to increase competitive advantage (competitive advantage) in order to support the cost leadership strategy of East Java Youth Lodging in order to survive and win with other tourist lodges and inns in Surabaya.Methods: This research uses a qualitative approach with the method chosen is a case study, while the type of this research is exploratory research.Results: The result of this research is that East Java Youth Lodging still has the opportunity to develop and compete in facing business threats because the Youth Lodging currently has a cost leadership strategy. East Java Youth Lodging as one of the accommodation services that offers cheaper prices with services and facilities that are no less than tourist lodges and other inns in Surabaya.Conclusion: Through the indication of primary activities with the value chain analysis process identified cost drivers that create opportunities for cost reduction, especially in logistics, so that the reduction in costs can be used as an increase in competitive advantage for East Java Youth Lodging.

scholarly journals Porter’s Generic Strategies and Performance of Selected Automotive Firms in Nairobi City County, Kenya

2020 ◽  
Vol 2 (2) ◽  
pp. 49-63
Author(s):  
Louisa Kabure ◽  
Mary Ragui
Keyword(s):  
Correlation Coefficient ◽  
Automotive Industry ◽  
Organization Performance ◽  
Sales Growth ◽  
Cost Leadership ◽  
Differentiation Strategy ◽  
The Government ◽  
Focus Strategy ◽  
Generic Strategies ◽  
Porter's Generic Strategies

Every firm operating in a dynamic and competitive environment must employ competitive strategies in order to enhance performance and remain relevant to the market. The automotive industry in Kenya has experienced shifts within the last couple of years that have disadvantaged automotive firms’ sales and this despite adequate capacity to supply local demand. Consequently, a persistent decline in volume sales has negatively impacted performance of these firms in overall, reducing competition to price wars that are not a viable option in the long run. This study therefore, sought to investigate the effect of Porter’s generic strategies on performance of selected automotive firms in Nairobi City County, Kenya. The specific objectives of the study were; to determine the effect of cost leadership strategy on the performance of selected automotive firms in Nairobi county, Kenya, to investigate the effect of differentiation strategy on the performance of selected automotive firms in Nairobi county, Kenya and to establish the effect of focus strategy on the performance of selected automotive firms in Nairobi county, Kenya. The scope entailed a study of selected new vehicle firms in the automotive industry in Nairobi County, Kenya. The study was anchored on three theories that included the market based view, the resource based view of the firm and Porter’s diamond theory of national advantage. Descriptive research design was adopted. The study used simple random sampling to attain the sample size and data was collected through drop and pick method using semi structured questionnaires. To ensure reliability in the questionnaire, Cronbach’s alpha correlation coefficient was used where a level of above 0.7 confirmed internal consistency. Pilot testing was done on ten respondents and Pearson’s product correlation coefficient was used to check for correlation between the study variables. A multivariate regression model was used to determine the relative importance of each variable to the study. Data collected was presented in graphs, tables and charts and a conclusion of the study drawn. The study revealed that cost leadership was significant in influencing the organizations’ performance. The study also revealed that differentiation affected their organizations’ performance to a great extent. The study also revealed that the focus strategy improved the sales growth in the firms thereby resulting to overall organization performance. The study concluded that cost leadership was significant in influencing the organizations’ performance. The study also concluded that differentiation affected their organizations’ performance to a great extent. The study also concluded that the focus strategy improved the sales growth in the firms thereby resulting to overall organization performance. The study recommended that the government and other policy makers come up with policies and regulations meant to foster innovation in the automotive industry. Policies should also be put in place meant for the creation of an enabling environment for fair and market driven competition to take place. The study recommended that the management of the automotive firms should often review their pricing structures and be geared towards minimizing their operational costs so as to offer cost friendly vehicles to the clients. The study also recommended that the firms’ management ensure they develop quality vehicles and embrace differentiation strategy so as to remain competitive in the market. The study also recommended that the management fully adopt the focus strategy to help in improving the sales growth in the firms thereby resulting to overall organization performance as well as improving on the product innovation which would lead to improved market share.

scholarly journals Management Strategies and The Performance of Youth Agri-Businesses in Kenya: A Case of Farm Africa

2020 ◽  
Vol 5 (1) ◽  
pp. 59-83
Author(s):  
Michelle Wambui Muiruri ◽  
Fr. Paul Mathenge ◽  
Dr. Joseph Ntale
Keyword(s):  
Interest Rates ◽  
Pearson Correlation ◽  
Management Strategies ◽  
Case Study Research ◽  
Market Price ◽  
Statistical Tool ◽  
Cost Leadership ◽  
Leadership Strategy ◽  
Focus Strategy ◽  
Cost Leadership Strategy

Purpose: The general objective of the study is to assess management strategies and performance of youth agribusinesses in Kenya: case of Farm Africa. Three research objectives were used; to find out the effect of differentiation strategy on the performance of youth led agribusiness at Farm Africa, to establish the effect of cost leadership strategy on the performance of youth led agribusiness at Farm Africa, and to assess the effect of focus strategy on the performance of youth led agribusiness at Farm Africa.Methodology: This study adopted a case study research design. The study population was all the 30 youth who participates in agribusinesses. Census method was then used since the population was manageable. This research study used questionnaires as the primary research instruments for data collection. A statistical tool known as Statistical Packages for Social Sciences (SPSS version 20) (Park, 2015) were used for the process of data analysis. The data that was collected was analyzed by use of descriptive statistics and Pearson Correlation analysis method as well as regression analysis.Findings: The study concludes that differentiation costs had positive significant relationship with the performance of agribusinesses at Farm Africa. The study concludes that cost leadership strategy led in the improvement of performance of agribusinesses at Farm Africa. The study concludes that majority of the farmers that were studied adhered to focus strategy because it helped them in improving overall performance of agribusinesses at Farm Africa. The study concludes that finance was a key determining factor in the performance of agribusinesses.Unique contribution to theory, practice and policy: The study recommends that farmers at Farm Africa need to adhere to product differentiation such that they cannot easily be copied by rivals. The study recommends that farmers should have flexible product costs together with water tight market price strategies that could promote performance. The study recommends that in order to enhance focus strategy, farmers should strive to exploit differences in cost behavior in market segments in order to improve agribusiness performance. The study recommends that policy makers should come up with farmer friendly financial policies that will cushion farmers from high interest rates charged by financial institutions such as MFIs and commercial banks.

scholarly journals Market Orientation And Performance: Does Organizational Strategy Matter?

2011 ◽  
Vol 18 (1) ◽  
Author(s):  
Kamalesh Kumar ◽  
Ram Subramanian ◽  
Karen Strandholm
Keyword(s):  
Firm Performance ◽  
Market Orientation ◽  
Customer Orientation ◽  
Positive Impact ◽  
Low Cost ◽  
Cost Leadership ◽  
Differentiation Strategy ◽  
Leadership Strategy ◽  
Competitor Orientation ◽  
Cost Leadership Strategy

Data from a survey of 159 hospitals was used to test the relationship between market orientation and firm performance for low cost and differentiation strategies. Hospitals pursuing a differentiation strategy had stronger market orientation than those pursuing a cost leadership strategy. Market orientation had a more positive impact on the performance of organizations pursuing a differentiation strategy than on those pursuing a cost leadership strategy. In the cost leader group, the inter-functional coordination component of market orientation significantly affected firm performance, while in the differentiator group the customer orientation and competitor orientation components of market orientation had significant impact on performance. The implications of these findings for managers also are discussed.

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