Creating competitive advantage through outsourcing: a survey of classified five star business hotels in Nairobi

Abstract

Outsourcing is a business strategy whereby a company hires an independent outside company to do some of its non- core company work. More companies prefer to own brand rather than physical assets; they are de-capitalising. A few companies are moving toward hiring outside parties to provide almost all services companies outsource a wide range of services all aimed at creating competitive advantages (Kotler, 2003).The study employed a descriptive survey design in establishing the effect of outsourcing strategy on competitive advantage of different five star hotels used to enhance their performance. The population of interest consisted of five star Hotels in Kenya that had been inspected, assessed and classified as five star Hotels in Nairobi and published as five star hotels in the Kenya Gazette. The main instrument in data collection was through semi structured questionnaires targeting at least three senior managers in each Hotel. Data collected quantitative in nature was analyzed by the use of descriptive statistics and was represented by means of SPSS package and presented through percentages, means, standard deviations and frequencies. The information was displayed by use of bar charts, graphs and pie charts. The study concludes that there are a number of potential sourcing strategies for improving performance which include investing to perform internally which involves investing the necessary resources in order to address the performance disparity in this process. The selection of this option will be influenced by the significance of the disparity in performance. Where the disparity is not significant, there is the potential to invest resources in order to perform the process internally. The study recommends that managers developing and implementing outsourcing strategies for their business processes should look beyond the headline indicators of poor process performance. Rather than perceiving outsourcing as the only vehicle to improve poor internal performance, it is important to understand the causes.