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A Case of Tuskys Retail Supermarkets in Nairobi, Kenya

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A Case of Tuskys Retail Supermarkets in Nairobi, Kenya RELATIONSHIP BETWEEN COMPETITIVE STRATEGIES AND ORGANIZATIONAL PERFORMANCE: A CASE OF TUSKYS RETAIL SUPERMARKETS IN NAIROBI, KENYA BY BETH N. MUIRURI UNITED STATES INTERNATIONAL UNIVERSITY- AFRICA SPRING 2020 RELATIONSHIP BETWEEN COMPETITIVE STRATEGIES AND ORGANIZATIONAL PERFORMANCE: A CASE OF TUSKYS RETAIL SUPERMARKETS IN NAIROBI, KENYA BY BETH N. MUIRURI A Research Project Report Submitted to the Chandaria School of Business in Partial Fulfillment of the Requirement for the Degree of Master’s in Business Administration (MBA) UNITED STATES INTERNATIONAL UNIVERSITY- AFRICA SPRING 2020 STUDENT’S DECLARATION I, the undersigned, declare that this is my original work and has not been submitted to any other college, institution or university other than the United States International University in Nairobi for academic credit. Signed: Date: Beth N. Muiruri (ID 656976) This project has been presented for examination with the approval of the appointed supervisor. Signed: Date: Dr. Veronica Kaluyu Signed: Date: Dean, Chandaria School of Business ii COPYRIGHT All rights reserved. No part of this project may be reproduced, stored in a retrieval system or transmitted in any form or by any means electronic or mechanical without prior written permission of the author. Beth Muiruri Copyright© 2020 iii ABSTRACT The purpose of this study was to investigate the relationship between competitive strategies and organizational performance, a case of retail supermarkets in Nairobi, Kenya. The study was guided by the following research questions; to find out the relationship between differentiation strategy and organizational performance, to examine the relationship between cost leadership strategy and organizational performance and to determine the relationship between focus strategy and organizational performance of Tuskys retail supermarkets in Nairobi, Kenya. The study used a cross-sectional and correlational research design to collect relevant data. The target population of the study was 264 employees of Tuskys retail supermarkets in Nairobi, Kenya, with a sampling frame of all senior employees of the retail supermarkets situated in Nairobi. The study utilized stratified random sampling technique in the selection of the appropriate sample and applied Yamane’s formula which helped determine the sample size of 159 senior employees. A semi-structured questionnaire was used to collect data from the selected respondents. For descriptive analysis mean and standard deviation were used. For inferential analysis, Pearson’s correlation coefficient was used to measure strength/degree of the relationships between study variables. Additionally, multiple regression analysis was used to establish the nature of the relationship between dependent and independent variables as well drawing predictions. The results from the first research objective showed that applying differentiation strategy strongly and significantly but negatively contributes to organizational performance of the retail supermarkets (r= -0.835, p-value <0.5).The regression analysis further implying that 75.1% of the variation in organizational performance in the retail supermarkets can be explained by the differentiation strategy. The results from the second research objective then revealed that applying cost leadership strategies strongly and significantly contributes positively to organizational performance of the supermarket (r= 0.850, p- value <0.01). A regression analysis further revealing that 72% of the changes in organizational performance in the retail supermarkets, can be explained by the cost leadership strategies in place. Finally, the results from the third research objective showed that applying focus strategy strongly and significantly contributes positively to organizational performance of the supermarket (r= 0.739, p-value <0.01).The results from regression analysis showed possibly that 54.3% of the changes in organizational performance can be explained by the focus strategy. iv The study results showed that applying differentiation strategy strongly and significantly contributes to organizational performance of the supermarket but can highly be attributed to the negative growth in organizational performance. Any variation in organizational performance in retail supermarkets can be explained by the differentiation strategy in place, meaning each unit increase in differentiation strategy causes a decrease in organizational performance. The results also showed that applying a cost leadership strategy strongly and significantly contributes to organizational performance of the supermarket highly attributed to the positive growth in organizational performance. A variation in organizational performance in retail supermarkets can be explained by the cost leadership strategies in place meaning each unit increase in cost leadership strategy causes an increase in organizational performance. The results showed that applying focus strategy strongly and significantly contributes to organizational performance of the supermarket, the application of the strategies is also attributed to the growth in organizational performance. Any variation in organizational performance in retail supermarkets can be explained by the focus strategies in place meaning each unit increase in focus strategy causes an increase in organizational performance. The study recommends that the retail supermarkets should work towards investing more in research and development departments where innovation can take place. It also recommends the use of brand extensions to easily gain customer base, increasing the market share. The retail supermarkets should also enhance outsourcing and introduce specialization of the employees. The retail supermarkets should also embrace the use of data analytics to make certain decisions such as big data and internet of things. Additionally, the study recommends further research on relationship between competitive strategies and organization performance of retail supermarkets with the operating environment as a moderating variable. v ACKNOWLEDGEMENT I would like to thank the Almighty God for the strength that enabled me proceed with this research. I would also like to express my gratitude to my supervisor, Dr. Veronica Kaluyu for her patience, guidance, stimulation and dedication without which I would not have been able to complete this project. I also thank the entire Chandaria School of Business for the support throughout this master’s program, this is including my fellow students who played a great role in making this a success. vi DEDICATION I would like to dedicate this project to my parents James and Mary and siblings Catherine, Kepha and Joan for their unwavering support, sacrifice and encouragement throughout my life. God bless you all. vii TABLE OF CONTENTS STUDENT’S DECLARATION ........................................................................................................ ii COPYRIGHT ...................................................................................................................................... iii ABSTRACT ......................................................................................................................................... iv ACKNOWLEDGEMENT ................................................................................................................ vi DEDICATION ..................................................................................................................................... vii LIST OF TABLES ...............................................................................................................................xi LIST OF FIGURES ........................................................................................................................... xii CHAPTER ONE .................................................................................................................................. 1 1.0 INTRODUCTION ......................................................................................................................... 1 1.1 Background of the Problem ...................................................................................................... 1 1.2 Statement of the Problem .......................................................................................................... 4 1.3 Purpose of the Study ................................................................................................................. 6 1.4 Research Objectives .................................................................................................................. 6 1.5 Research Hypothesis ................................................................................................................. 6 1.6 Significance of the Study .......................................................................................................... 7 1.7 Scope of the Study .................................................................................................................... 7 1.8 Definition of Terms................................................................................................................... 8 1.9 Chapter Summary ..................................................................................................................... 9 CHAPTER TWO ............................................................................................................................... 10 2.0 LITERATURE REVIEW .........................................................................................................
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