Relationship between Competitive Strategies and Organization Performance among Four and Five Star Hotels in Nairobi County

Abstract

Across organizations strategic management forms the platform utilized by them in their collective action and determinations in the realization of improved results and some market advantage over rivals. Organizations deploy competitive strategies with mixed effects on performance. The primary intention of this work is to look at the existing relationship amongst competitive strategies and organization performance among four and five star hotels in Nairobi County. Guiding the study was the objective to examine the manner differentiation strategy, cost leadership strategy and focus strategy all relate with the organizational performance of four and five start hotels in Nairobi County, Kenya. The study was guided by Resource based Theory RBV (1959), Ansoff’s Growth Strategy (1961), and McKinsey 7S Model. A descriptive research design was adopted with a target population of 66 general managers and assistant general managers of four and five star hotels in Nairobi County, Kenya. A census survey was used in the study. Data collection tool was questionnaires. Descriptive included mean and standard deviation, while inferential statistics included correlation and regression were used for analysis of quantitative data. Statistical Package for Social Sciences version 23.0 was used for data analysis. This study may be significant to the management in five star hotels in Nairobi County since it could complement efforts around formulation and deployment of appropriate plans to realize institutional goals, and secure relevance in the current dynamic business world. The study findings reveal that performance of four and five start hotels in Nairobi County, Kenya was significantly related with cost leadership strategy (p < 0.05) and focus strategy (p < 0.05). However, the relationship amongst differentiation strategy against performance was insignificant at p > 0.05 but only significant at p <0.1). A determination was also made that despite differentiation strategy having a negative influence on performance (t = -.240, p >0.5) both cost leadership strategy, and focus strategy had positive influence on performance (cost leadership strategy: t = 0.363, p <0.05; Focus Strategy: t = 5.266, p <0.05). The implication of these findings is that managers in four and five start hotels in Nairobi County, Kenya need to adopt cost leadership strategy and focus strategy, which would positively contribute to performance. The four and five start hotels in Nairobi County, Kenya should continue emphasizing on product differentiation strategy. The study’s recommendation is that, the level 4 and 5-star hotel leaderships ought to recognize and utilize generic plans towards the enhancement of organizational success. According to the study, the leadership of Nairobi’s 4 and 5-star hotels plays a key contribution in the provision of advisory, knowledge and important data to the organization’s processes thus placing the organization in a strategic position competitively. There ought to be increased effort on supervision and monitoring for the purposes of realizing reduced costs. A reduction of costs calls for the establishment of cost-limiting instruments and a comprehensive adoption of cost cutting measures in departments like innovation and research, marketing.