THE RELATIONSHIP BETWEEN PORTER’S GENERIC STRATEGIES AND COMPETITIVE ADVANTAGE A CASE STUDY OF BUS COMPANIES PLYING THE KISUMU-NAIROBI ROUTE, KENYA

Abstract

Porter’s generic strategies namely cost leadership, differentiation and focus have become increasingly important for companies to gain valuable insights from customer needs and ultimately competitive advantage. This study aims at establishing the relationship between Porter’s generic strategies used by bus companies plying the Kisumu Nairobi route and competitive advantage. The specific objectives of this study are: (i) to establish the relationship between cost leadership strategy and competitive advantage, (ii) to establish the relationship between differentiation strategy and competitive advantage, (iii) to establish the relationship between focus strategy and competitive advantage and (iv) to establish the relationship between combined (or integrated) Porter’s generic strategies and competitive advantage. The population for this study consisted of all the 28 bus companies plying Kisumu – Nairobi route. Data was collected by use of survey questionnaires which were distributed to the Operation Managers (twenty eight number) and Route Managers (twenty eight number) of the various bus companies stationed in Kisumu. Data was analyzed by use of descriptive and inferential statistics through excel spread sheets. The study findings established that out of the 28 bus companies plying the Kisumu – Nairobi route, 34.82% adopted cost leadership strategy, 42.85% adopted differentiation strategy, 42.52% focus strategy while 36.57% adopted integrated strategies. More bus companies adopted differentiation strategy than cost leadership strategy, focus strategy and integrated strategies. The study further established that there is a strong positive correlation between Porter’s generic strategies and competitive advantage.