Influence of competitive strategies on performance of hotels: a case of Thika town, Kenya

Abstract

The hotel industry in Kenya has in the past few years experienced a lot of changes and growth which have affected the state of competition. This has demanded that the hotels formulate and implement competitive strategies to be able to cope with competitive pressure. The study sought to determine the competitive strategies employed by the hotels in Thika town and the influence of the competitive strategies on the performance of hotels. The study objectives include; to establish the influence of cost leadership, differentiation and focus (cost leadership, differentiation) on performance of hotels in Thika town. The beneficiaries of the findings of the study will include; the hotel owners and managers in Thika town and other areas will understand, formulate and implement the competitive strategies that will help improve their performance, the owners and managers of other business enterprises, other players wishing to join the hotel industry will have an understanding of the competitive strategies employed and therefore stand a higher chance of success and students from institutions of higher learning will access material for increasing their knowledge and undertake related studies. The study has reviewed existing literature on the competitive strategies using the Igor Ansoff and Michael Porter models and identified a knowledge gap to be addressed through a crosssectional survey; targeting eating house hotels. This study was conducted using a descriptive research design. An interviewer-administered questionnaire was piloted and pretested after which it was administered to all participants on consenting to be part of the research. A sample of 50 owners/managers of hotels was used with a target population of 150 persons. Quantitative data was coded and entered into Statistical Packages for Social Scientists (SPSS Version 17.0) and analyzed using descriptive statistics. The finding was presented inform of frequency tables and explanations were presented in prose. In addition, the researcher conducted a Karl Pearson’s Product moment correlation coefficient to ascertain whether a statistical significant relationship exists between the independent variables and the dependent variable. The study established that differentiation strategies had the strongest influence on performance with a correlation coefficient of 0.933. Cost leadership strategies also had significant influence on performance with correlation coefficients of 0.897. Focus (cost leadership, differentiation) strategies also had significant influence on performance with correlation coefficients of 0.883. Meaning the findings of the study indicated that the strategy with the strongest influence on performance of hotels is differentiation strategy.