Effect Of Strategic Orientation On The Performance Of Large Retail Stores In Nairobi, Kenya

Abstract

In the present day business environment, rivalry and competition among the business firms has reached unprecedented heights and in the process acquiring and sustaining competitive edge has become a key strategy to survival for most of the firms. Strategic orientation is the core element to success for many organizations in creating proper behaviors to achieve superior performance, since strategic orientation focuses on the way a firm adapts and interacts with its external environments. Strategic orientation has been gaining more attention since it was recognized as the core element to success for many organizations. Strategic orientation is related to creating proper behaviors to achieve superior performance and it focuses on the way a firm adapts to and interacts with its external environments. For strategic orientations to be effective, companies must create an internal alignment between organizational features (goals, values, resources, capabilities, structure and systems) and create a fit between the internal organizational and its external environment. This fit depends on the strategic orientation a company has. The objective of the study was to determine the effect of strategic orientation on the performance of large retail stores in Nairobi. The research design adopted was descriptive cross sectional research design. The population of the study comprised of all the 15 large retail stores in Nairobi. The study used primary data that were collected through selfadministered questionnaires. The data was analyzed by the use of descriptive statistics. The regression analysis was used to assess the effect of strategic orientation on the performance of large retail stores in Nairobi. The study established that market orientation enables the retail stores to focus on ensuring that the customers are satisfied through review of business strategy, competitor analysis, customer future needs discussion, focusing more on customers than competitors and dissemination of data on customer satisfaction at all levels. Entrepreneurial orientation was found to have enabled the retail stores to launch new products in the market, adopt aggressive attitude towards competitors, reviewing periodically product development to ensure that they are in line with what customers want, developing innovative actions, and carrying out risky projects when they involve profitable opportunities. The findings on interaction orientation was that the stores encourages customers to share opinions on the firm products and encourages customers to participate interactively in designing products, thus enabling the firms to understand the customers’ needs thus coming up with products that will give the store a competitive edge over its competitors. The pursuit of strategic orientation was found to have resulted in an increase in market share, relationship with customers, efficiency in serving customers, sales volume, profits and customer satisfaction. The regression analysis revealed that the performance of large retail stores was influenced to a large extent by market orientation, entrepreneurial orientation and interaction orientation.