STRATEGIC ROLE OF BIG DATA ANALYTICS ON THE COMPETITIVE ADVANTAGE OF SUPERMARKET CHAINS: A CASE STUDY OF NAKUMATT HOLDINGS LIMITED BY KENNETH PATRICK OGWANG UNITED STATES INTERNATIONAL UNIVERSITY – AFRICA FALL 2016 STRATEGIC ROLE OF BIG DATA ANALYTICS ON THE COMPETITIVE ADVANTAGE OF SUPERMARKET CHAINS: A CASE STUDY OF NAKUMATT HOLDINGS LIMITED BY KENNETH PATRICK OGWANG A Research Project Report Submitted to the Chandaria School of Business in Partial Fulfilment of the Requirement for the Degree of Masters in Business Administration (MBA) UNITED STATES INTERNATIONAL UNIVERSITY – AFRICA FALL 2016 STUDENT’S DECLARATION I, the undersigned, declare this my original work and has not been submitted to any other college, institution or university other than United States University in Nairobi for academic credit. Signed __________________________ Date: _______________________________ Kenneth Patrick Ogwang (645395) This project report has been presented for examination with my approval as the appointed supervisor. Signed __________________________ Date: _______________________________ Dr. Paul Katuse Signed: __________________________ Date: _____________________________ Dean Chandaria School of Business ii COPYRIGHT © 2016 Kenneth Patrick Ogwang ALL RIGHTS RESERVED. Any unauthorized reprint or use of this research report is prohibited. No part of study may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information storage and retrieval system without express written permission from the author and the university. iii ABSTRACT The main aim of this study was to establish the role of Big Data Analytics (BDA) on the competitive advantage of supermarket chains in Kenya. A case study was done on Nakumatt Holdings Limited. The study was guided by three research questions and these are; how BDA of customer trends and patterns impact differentiation within Nakumatt, how use of Nakumatt loyalty cards increase customer repetitive buying and lastly how use of Big Data Analytics creates cost leadership over Nakumatt’s competitors. This research focussed on the population of Nakumatt managers, employees and customers in Nairobi. In this study, the sampling frame involved the management staff at Nakumatt as well as the customers that are loyalty card holders from all the 23 branches in Nairobi. Random sampling was used for customers as they exited the branches. Ultimately, we spoke to every 5th customer exiting the supermarket after completion of an interview. This study adopted the Probability based technique for sampling. Under this, stratified random sampling Technique was adopted for the collection of data about the population from the entire population. The Strata was the Senior Management, Employees in Operations and the Nakumatt Loyalty Card Holders. The data collected through this method gave the researcher the opportunity for an intensive study about the problem area. To obtain the minimum population sample for this study, the researcher used the rule of thumb and therefore targetting all the 23 branches in Nairobi, and the top management at Nakumatt in charge of operations department. Questionnaires were used to collect data for this research and collected data was analysed using Statistical Package for Social Sciences (SPSS) program and analysis presented in tables, and figures in chapter four to give a clear picture of the research findings. iv ACKNOWLEDGEMENT The submission of this work is the culmination of a long hard fought journey, the idea of which was borne many years ago. Following on the saying that ‘A journey of a thousand miles starts with one step”, I am thankful to many people for having enabled me make that first step. I would not have been able to achieve this success without the splendid support of a number of important persons, who in their own way, directly and indirectly contributed to it. First and foremost I sincerely thank God Almighty who gave me the grace and strength to persevere this far. I would like to thank my supervisor for inspiring me every step of the way. His tireless and selfless effort in advising, correcting and mentoring me gave the much needed push to keep me focused on my goal. I thank all my friends, classmates and office colleagues who encouraged and inspired me to the very end with their timely advice and invaluable support. I acknowledge the USIU administration for the opportunity to further my education; to them I will ever be indebted. To my family, yours has been a sacrifice that only God will be able to repay. For the encouragement and creation of an enabling environment, without your support I would not have been able to make it. Special thanks to my Dad and Mum (both deceased) who laid a firm foundation for me and taught me to pursue big dreams. v TABLE OF CONTENTS STUDENT’S DECLARATION ........................................................................................ ii COPYRIGHT ....................................................................................................................iii ABSTRACT ....................................................................................................................... iv ACKNOWLEDGEMENT ................................................................................................. v LIST OF TABLES ..........................................................................................................viii LIST OF FIGURES .......................................................................................................... ix LIST OF ABBREVIATIONS ........................................................................................... x CHAPTER ONE ................................................................................................................ 1 1.0 INTRODUCTION........................................................................................................ 1 1.1 Background of the Problem ........................................................................................... 1 1.2 Statement of the Problem ............................................................................................... 5 1.3 Purpose of the Study ...................................................................................................... 7 1.4 Research Questions ........................................................................................................ 7 1.5 Significance of the Study ............................................................................................... 7 1.6 Scope of the Study ......................................................................................................... 8 1.7 Definition of Terms........................................................................................................ 8 1.8 Chapter Summary .......................................................................................................... 9 CHAPTER TWO ............................................................................................................. 10 2.0 LITERATURE REVIEW ......................................................................................... 10 2.1 Introduction .................................................................................................................. 10 2.2 Use of Customer Trends data to create differentiation in Nakumatt ........................... 10 2.3 Use of loyalty cards in driving repetitive purchase amongst Supermarket Customers 13 2.4 Use of BDA in Creating Cost Leadership within Supermarket Chains ....................... 17 2.5 Chapter Summary ........................................................................................................ 20 CHAPTER THREE ......................................................................................................... 21 3.0 RESEARCH METHODOLOGY ............................................................................. 21 3.1 Introduction .................................................................................................................. 21 3.2 Research Design........................................................................................................... 21 3.3 Population and Sampling Design ................................................................................. 22 vi 3.4 Data Collection Methods ............................................................................................. 24 3.5 Research Procedures .................................................................................................... 25 3.6 Data Analysis Methods ................................................................................................ 26 3.7 Chapter Summary ........................................................................................................ 27 CHAPTER FOUR ............................................................................................................ 28 4.0 RESULTS AND FINDINGS ..................................................................................... 28 4.1 Introduction .................................................................................................................. 28 4.2 Demographic Information ............................................................................................ 28 4.3 To What Extent Does Big Data Analytics Of Customer Trends And Patterns Impact Differentiation Within Nakumatt? ....................................................................................