Competitive Strategies and Performance of Selected Lodges in Isiolo County, Kenya

Abstract

In the highly competitive hospitality industry, hotels continually seek effective strategies to enhance their performance and maintain a competitive edge. The growth in the number of hotels in Kenya in the recent past has resulted in competition. This has prompted lodges to come up with strategies to enable efficient and effective operations with a focus on strategies tailored to the market segment and geographic location. However, it is not clear if these strategies are effective in lodges in Isiolo County. This study sought to establish the effect of competitive strategies on the performance of lodges in Isiolo County. Specifically, the study determined the effect of cost leadership strategy, differentiation strategy and focus strategy on performance of lodges in Isiolo County. The study was anchored on Porter’s Generic strategies framework and Balanced scorecard. Explanatory research design was adopted. The target population of the study was 192 employees from 4 lodges in Isiolo County out of which 128 formed the sample size. Purposive sampling was used to select the lodges while stratified and simple random sampling techniques selected the employees. A structured questionnaire was used to collect data from the employees which was analyzed using multiple linear regression. The regression model coefficient determination R 2 =.433 considered with all independent variables explains 43.3% of variation on performance of lodges. The findings of the study found that cost leadership strategy (β 1 =0.021, p=0.837), focus strategy (β 2 =0.123, p=0.199) and differentiation strategy (β 1 =0.097, p=0.246) do not affect performance of lodges in Isiolo County (p>0.05). The study therefore concludes that cost leadership, focus and differentiation strategies do not affect performance of lodges in Isiolo County. The study recommends that the lodges reduce cost of operations, source supplies directly from the market and form linkages with suppliers to achieve cost leadership; undertake analysis of the lodges strength, weaknesses, threats and opportunities to focus on the targeted goals of the niche market and develop unique products to differentiate from competitors in order to achieve high ranking, increased revenue and customer patronage to improve performance of the lodges.