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Table of Contents
THESIS
Greener Journal of Social Sciences
DOI: https://doi.org/10.15580/gjss.2024.121824140
By
D53/OL/CTY/27877/2018
A RESEARCH PROJECT SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENT FOR THE AWARD OF THE DEGREE IN MASTER OF BUSINESS ADMINISTRATION (STRATEGIC MANAGEMENT OPTION), SCHOOL OF BUSINESS, KENYATTA UNIVERSITY
AUGUST, 2024
This master thesis is a dedication to the members of my family who have supported me relentlessly throughout this project. Their love and encouragement has seen me through my entire course program and project work.
I relay my acknowledgement to God for his abundant favor, provision of the resources necessary to conduct this project and the blessing of good health that gave me the strength and the ultimate opportunity and strength to pursue this Master’s program. The vital professional guidance and assistance relayed by my supervisor, Dr. Rosemarie Wanyoike in my project work phase is awe-inspiring. May the Lord’s favor be with you in abundance. Additionally, the lectures for this MBA program at Kenyatta University contributed significantly to the success of this project and I appreciate them. My appreciation also goes out to my mother Anne Kwamboka, my sister Ruth Aberi and my friend Dennis Oketch for their unwavering support through prayers and words of encouragement.
DEDICATION ii
ACKNOWLEDGEMENT ii
TABLE OF CONTENTS iv
List of tables vi
List of figures vii
OPERATIONAL DEFINITION OF TERMS viii
ABBREVIATIONS AND ACRONYMS x
CHAPTER ONE: INTRODUCTION 1
1.1 Background to the Study 1
1.1.1 Organizational Performance 2
1.1.2 Competitive Strategies 4
1.1.3 The Hospitality Industry in Kenya 7
1.2 Statement of the Problem 8
1.3.1 General Objective 13
1.3.2 Specific objectives 13
1.4 Research Questions 14
1.5 Scope of the Study 14
1.6 Significance of the Study 14
1.7 Limitations of the Study 15
1.8 Organization of the Study 16
CHAPTER TWO: LITERATURE REVIEW 17
2.0 Overview 17
2.1 Theoretical Examination 17
2.1.1 Resource-Based View Theory (RBV) 17
2.1.2 Porter’s Generic Competitive Strategies 19
2.1.3 SERVQUAL Model Theory 22
2.2 Empirical Literature Review 24
2.2.1 Cost Leadership Strategy and Organizational Performance 24
2.2.2 Differentiation Strategy and Organizational Performance 27
2.2.3 Focus Strategy and Organizational Performance 30
2.3 Summary of Literature Review and Research Gaps 33
2.4 Conceptual Framework 41
CHAPTER THREE: RESEARCH METHODOLOGY 42
3.1 Introduction 42
3.2 Research Design 42
3.3 Target Population 42
3.4 Sampling Design and Procedure 43
3.5 Data Collection Instrument 44
3.6 Validity and Reliability Testing 45
3.6.1 Validity Testing 45
3.6.2 Reliability Testing 46
3.7 Data Analysis and Presentation 46
3.9 Ethical Considerations 48
CHAPTER FOUR: DATA PRESENTATION, ANALYSIS, AND DISCUSSIONS 49
Introduction 49
4.1 Reliability Statistics 49
4.2 Demographic statistics 50
4.3 Descriptive statistics 55
4.4. Correlation analysis 60
4.5 Regression analysis 61
4.6 General discussions of the derived findings 62
CHAPTER FIVE CONCLUSIONS 68
5.1 Conclusion 68
5.2 Limitations of the study 69
5.3 Implications for practice 70
5.4 Suggestion for future studies 70
APPENDICES 85
APPENDIX I: RESEARCHER’S INTRODUCTORY LETTER 85
APPENDIX III: FIVE-STAR HOTELS IN NAIROBI CITY COUNTY 93
APPENDIX IV: TIME PLAN 94
APPENDIX IV: RESEARCH BUDGET 94
Table 2.1 Summary of Research Gaps …………………………………………………………. 33
Table 2.2 Conceptual Framework ……………………………………………………………… 41
Table 3.1 Five-star hotels in Nairobi City County ……………………………………………… 43
Table 3.2 Distribution of Target Population …………………………………………………… 44
Table 4.1 Cronbach’s Alpha ……………………………………………………………………. 49
Table 4.2 Gender ……………………………………………………………………….………. 50
Table 4.3 Age ………………………………………………………………………….……….. 51
Table 4.4 Education Level ……………………………………………………………….…….. 52
Table 4.5 Working Period ………………………………………………………………………. 53
Table 4.6 Departments ……………………………………………………………………….… 54
Table 4.7 The Competitive strategies used and their contributions to improving performance
of a hotel …………………………………………………………………………….. 55
Table 4.8 Cost Leadership Strategy ……………………………………………………………. 56
Table 4.9 Product / Service Differentiation …………………………………………………….. 57
Table 4.10 Focus Strategy ……………………………………………………………………… 58
Table 4.11 Measures of Organisational Performace …………………………………………… 59
Table 4.12 Correlation Analysis ……………………………………………………………….. 60
Table 4.13 Regression Statistics ……………………………………………………………….. 61
Figure 4.1 Gender ……………………………………………………………………………… 51
Figure 4. 3 Age …………………………………………………………………………………. 52
Figure 4. 4 Education level ………………………………………………………………….…. 53
Figure 4. 5 Working Period ………………………………………………………………….… 54
Figure 4. 6 Departments …………………………………………………………………….….. 55
Figure 4. 7 Unique and diverse offerings …………………………………………….…………. 58
Figure 4. 8 Customer satisfaction through our loyalty program ……………………………….. 60
1.1 Background to the Study
Complexity and dynamics, continuous technological change, the influx of new competitors and, most recently, the Covid-19 global health crisis have affected the hospitality sector significantly. Kaplan and Norton (2012) point out that result consistent with performance are critical for any association, the hotel industry being one of them. Stakeholders are the foundation of how well any hotel achieves its goals. Hence, the performance of a hotel necessitates evaluation beyond the financial perspective, which includes the management’s, customers’, suppliers’, and employees’ perspectives. Most businesses are concerned with their sustainability in maintaining their competitive advantage and market viability. Therefore, it is reasonable that hotels embrace market changes and maintain a competitive advantage by constantly updating and adjusting their competitive policies and methods (Kitua, 2014). Those, as mentioned earlier, can be achieved through decreased costs and better benefits to satisfy customers’ changing needs and wishes, thus providing customers with better value for money. According to Tanwar (2013), competitive strategy, originally proposed by Porter (1985), provides the context for implementing the firm’s overall strategy, enabling it to achieve its strategic goals and sustained organizational performance in the industry. As Ayele (2012) points out, the needs and expectations of clients also grow over time. Like other industries, hotels use a strategic approach to control their performance with the aim of achieving comprehensive global standardized credentials, institutional awards, and reputations annually (Ongore et al., 2011). Most states across the globe are currently concerned with improving the strategies adopted by the hospitality sector to maximize performance. According to conclusions by Mayank et al. (2017), the achievements of Indian service sector organizations has been severely affected due to globalization and liberalization in the economy, which has led to a shift in the concept of organizations from how companies maximize profit to the strategies that institutions employ to ensure maximum satisfaction for its client. Therefore, it is found that performance improvement is necessary within the service sector. Some strategies that could aid performance improvement include better competitive measures, improved quality of merchandise and services, and efficient delivery. The hospitality industry in Kenya is facing huge constraints, such as advanced changes in technology, the proportion of new entrants, and the negativity associated with the Covid-19 global health crisis, whose aftermath has been a drop in tourism and hospitality activity, resulting in some hotels closing down couple with increased complexity in clients’ needs and desires.
1.1.1 Organizational Performance
Organizational performance shows the proficiency of the company management to fulfill its goals and objectives through its devotion to organizational learning, excellence, and customer and staff focus (Sakka, 2013). Machuki et al. (2011) further explain organizational performance as an enterprise’s accomplishment in line with specific standards and that organizational performance is a measure of the effectiveness of an enterprise. Gavrea et al. (2011) as that the accomplishment of an organization is essential to constructing a system that allows the organization to recognize, plan and execute arising prospects for continuous improvement and growth. Evaluating the performance of an organization is a complex process that involves the analysis of both economic and non-financial indicators to assess how current operations will affect future outcomes. Luo et al. (2012) recognized the importance of examining operational and economic factors when assessing a company’s performance. Economic indicators typically involve the analysis of financial metrics such as revenue, profitability, return on capital employed, market dominance, cost-profitability, and other monetary measures.
On the other hand, operational productivity is centered on customer satisfaction and loyalty, labor productivity, stakeholder satisfaction, social capital, and the organization’s competitive advantage stemming from its resources. Various scholars have investigated organizational performance in a variety of contexts. Akingbade (2015) investigated whether competitive strategies demonstrate a significant or negligible effect on the accomplishments of specific telecommunication industries in Lagos, Nigeria. The author employed non-commercial indicators of client satisfaction and loyalty retention to investigate the aforementioned. Findings from the investigation inform that employing strategies that focus more on meeting customers’ needs and wants has a significant influence on how Lagos’ telecommunication companies perform. Muller et al. (2018) conducted an additional study to assess how servant leadership affects how organizations in the Eastern Cape Province maximize profits. The Balance scorecard model was employed to examine how the organization achieved customer satisfaction, achieved results, developed core competencies, obtained financial success, and encouraged learning and innovation. The outcomes showed that servant leadership had had a positive impact across all the aspects mentioned above of organizational performance. Kamau (2017) in Kenya researched competitive strategies and the significance they have on goal achievement of life insurance companies. The dependent variable was measured by economic indicators, such as profitability, retention of clients, market dominance, and Return on Capital Employed. The results revealed that different companies use different contextual elements and unique, dynamic strategies for the purpose of gaining a competitive advantage. An analysis of how organizational performance and competitive strategies are associated is essential in the city of Nairobi’s five-star hotels. Previous studies on measuring organizational performance have been evaluated. However, this study will take into account various non-monetary measures for instance fulfillment of clients’ needs, market dominance, and employee professional fulfillment with the intention to determine how five-star hotels perform in the area, as proposed by various scholars including Muller et al. (2018), Kamau (2017), and Akingbade (2015). This research intends to provide an understanding of the problem. The hospitality field comprises of many stakeholders and the results from this research intends to give them insights to better comprehend how to assess current performance and manage strategies to stay competitive in the market in order to improve their results, specifically due to the difficult circumstances caused by the Covid-19 global health crisis.
1.1.2 Competitive Strategies
Porter (1985) posited that a competitive strategy involves a portfolio of plans employed by a business to achieve its objectives in the marketplace. Oyiela (2011) stated that it is a means for a corporation to gain the upper hand over its rivals. Sifuna (2014) contended that these techniques are likely related to a company’s ultimate success. Raduan et al. (2009) argued that competitive strategies could provide a firm with a distinct discernment of the institution’s present and the future by having a solid strategy in the entire market to enter. Thompson and Strickland (2010) argued that the competitive strategy of a particular institution involves maximizing the strategies they have to attract customers, allowing them to possess a competitive edge that positions the organization above the rest in the market. This, in turn, refines how the organization competes in the business sector, which translates to clients gaining unique value. The management in the hotel industry must adjust their strategies to accommodate potential clients’ expectations and preferences as the needs and demands in the hospitality field continue to change rapidly across the globe.
Previous studies that have investigated organizational performance have been conducted. Taghipour et al. (2020) contribute to the research on how competitive tactics associate with corporate performance through a case study of the Parsian Bank of Tehran. Some effective tools the researchers implemented to estimate competitive tactics include differentiation, cost, and focus strategies. Coupled with structural equation modeling, findings from the research results established alignment between competitive tactics and corporate performance among the dynamic professionals and experts at the Parsian Bank. Farah (2018) carried out a survey to investigate whether competitive strategies have a significant influence on how commercial airlines perform in Kenya. The strategies examined included development of new, cost leadership, market core, and differentiation. The data established a positive connection between all four independent variables and how Kenyan commercial airlines perform. Kahingo (2018) further studied how competitive strategies associate with the sustainability of Microfinance enterprises in Murang’a County, Kenya. This research aims to analyze how the competitive strategies that the hospitality industry in the county of Nairobi has employed, specifically the focus strategy, product development, cost leadership, and differentiation measures, relate to how these institutions in the hospitality industry achieve their expected goals. The motivation behind this investigation includes the necessity to span across the knowledge gap resulting from unique and specific competitive strategies adopted by the hotel sector. Furthermore, the study will build upon the relatable research that has measured the correlation of these strategies with the feasible aspect of Microfinance institutions. This study has various objectives including maximizing; how an institution incorporates differentiation, cutting down on operation costs, and focus strategies as independent variables in five-star hotels, as suggested by Taghipour et al. (2020), Farah (2018), and Kahingo (2018).
Porter (1985) suggested cost leadership as an approach that an institution employs with the intention to lead its industry by having the lowest cost of production. Firms can utilize their resources to achieve reduced production costs through various strategies, such as ensuring they access raw materials exclusively; firms can also use advanced technology to cut costs on production, maximizing discounts through purchasing materials in bulk and specializing in labor, among others. According to Ireland et al. (2011), the firms can achieve reduced delivery costs while maintaining the quality of their merchandise and services, thus providing customer satisfaction compared to other competing firms. Low-cost production and reduced merchandise and services’ prices serve as the lens through which this study assesses cost leadership.
Thompson et al. (2010) highlighted that product/service differentiation is an effective second strategy for a firm. This strategy involves developing unique merchandise and services that appeal to customers and fulfill clients’ needs and perceptions. This technique purposes to create customer loyalty and a strong brand image. In line with the differentiation concept, this research seeks to explore personalized services, product/service differentiation, and loyalty programs.
Porter (1985) also proposes the Focus strategy approach, in which an organization devotes its efforts to a smaller segment of its target market. This approach intends to either decrease the operating budget with the intention of gaining the upper hand within smaller market segments, or to customize the merchandize to align with the unique preferences of specific customers, establishing a distinctive presence in the marketplace. This study will explore focus strategies in the form of segmenting hotel customers and specializing products and services.
1.1.3 The Hospitality Industry in Kenya
As Barrows and Powers (2012) suggested, the hotel and catering sector encompasses a pool of organizations whose objective entails satisfying the needs of clients’ seek various services outside of their homes. These services include accommodation and entertainment, a variety of meals and refreshments which can be both alcoholic and soft beverages. In line with the definition provided by Kenya’s Hotel and Restaurants Act Cap 494, a hotel is a place of business that provides accommodation, with or without meals and other services, for a fee. The Tourism Regulatory Authority (TRA), under the Tourism Act 2011 and Tourism Regulatory Authority Regulations 2014 (TRA, 2015), governs the field of hospitality in Kenya. According to findings by Letangule (2012), the tourism sector has seen an improvement in overall performance due to the hospitality industry’s recognition for boosting tourism and providing jobs to the many Kenyans seeking work opportunities. However, Mwihaki (2017) notes that the rise in the industry has brought about a high degree of competition amongst hotels that have a star rating in the county of Nairobi, leading to a need to provide personalized and specialized services. This has resulted in a decrease in the performance of hotels since 2020. Faria (2021) found that the arrival of international visitors to Kenya significantly decreased in 2020 following the Corona Virus pandemic, whose catastrophic effects spilled over to the Tourism and Hospitality industries resulting into a hefty income loss. The aftermath resulted in over Kshs. 2.5 million of revenue loss in the initial half of that year.
The TRA 2018 classification registry of statistics shows that the city of Nairobi boasts being a location with the most five-star hotels compared to other counties in Kenya. This implies that the city Nairobi is more advanced in the hospitality industry than other counties, which is why it was chosen as the focus of this study. The five-star rating system used by TRA is a measure of exceptional guest services and state-of-the-art facilities that these hotels provide. As at the start of 2020, the Tourism Regulatory Authority (TRA), listed 11 five-star hotels in the county of Nairobi. These hotels included the Intercontinental Hotel, Radisson Blue Hotel, The Sarova Stanely, Villa Rosa Kempinski, Fairmont the Norfork, Sankara Hotel, The Boma Nairobi Hotel, Crowne Plaza Nairobi Airport Hotel, The Tribe Hotel, Dusit D2 and Hemingway’s Nairobi. Hotels such as the Norfolk, the Fairmont, and the Intercontinental had to close following the negative impact of the coronavirus pandemic, thus reducing the number of five-star hotels in the city of Nairobi to nine.
1.2 Statement of the Problem
The Kenyan Government, through the lens of the National Tourism Strategy 2013-2018, has identified the field of Tourism and Hospitality as a critical source of income for the nation as outlined in its National Tourism Strategy 2013-2018. It currently contributes 8.8% of the nation’s GDP and has provided job opportunities n improve the balance of payment (National Tourism Strategy, 2019). According to the Kenya Economic Report (2019), the Tourism and Catering field account for a significant number of the Kenya’s total jobs estimate 8.5%. The World Travel & Tourism Council (2019) further stated that this sector primarily adds to the nation’s Gross Domestic Product (GDP), registering a 5.5 percent estimated growth in 2019. Despite the pandemic, the industry’s revenue decreased by almost half, and the number of people employed dropped from 8.5% in 2019 to 6.4% in 2020 due to the repercussions of Covid-19. The hospitality industry has faced several difficulties due to travel restrictions and advisories, some high-end establishments’ closures, and increasing market share competition. This has caused an immense loss of revenue and job opportunities. Additionally, customer tastes and preferences have become more sophisticated, and employee needs and satisfaction have become more demanding. As a result, without the proper implementation of competitive strategies, hotels are at a disadvantage of gaining the upper hand survive in a dynamic environment, or become sustainable.
Additionally, scholars have carried out other studies in the past in various industries and different circumstances. For instance, Akintokunbo (2018) conducted a study within the telecommunication field. This study seeks to investigate how various elements, more specifically market focus elements, and influence how a telecommunication company in Port Harcourt, Nigeria performs. Using a market-focused approach, the research variables and organizational performance are independent and dependent, respectively. At the end of the study, it was concluded that the correlation between the approach to competition as a strategy and organizational performance was significant and positive. Another study by Bundi (2017) looks at competitive approaches within the Kenyan field banking and how these approaches influence the way the banking field in Kenya operates in terms of goals achievement. Another study by Bundi (2017) looks at competitive approaches and performance in the Kenyan banking sector. An investigation on Equity Bank showed that competitive strategy influenced how the banking sector in Kenya achieved its goals significantly. Another service field with related research is the aviation industry, conducted by Omwoyo (2016). The author provided an analysis of the general methods that have an impact on Kenya’s aviation field competitive advantage. Facts from the research suggests that Kenya Airways, airlines Fly 540, and Fly-SAX have deployed competing generic strategies which yielded positive benefits in term of effectiveness and efficiency. Still, they have adequate in-depth knowledge of how to implement these methods to improve their performance results and competitive advantage.
While previous research has investigated how general competitive approaches have broadly influence outcomes within the banking, telecommunications, and airline industries, a detailed investigation with a focus on the hospitality industry has been conducted. Therefore conclusions drawn from findings in the hospitality industry cannot be taken as General insights into the hospitality industry, as each industry has unique competitive strategies. In this field, there is little research on the different strategies that the hospitality industry can use to enhance performance. For example, Theuri et al. (2021) correlation between the competitive approaches that five-star hotels in the county of Nairobi have incorporated and their respective market share. The research investigation linked cost leadership and focus and differentiation to the market dominance of 5-star hotels, with the latter being the dependent variable. Sales growth, hotel capacity bed capacity, and hotel outlets served as measures of the investigation, as mentioned earlier. The research done by Hassan (2018) showed that competitive strategies have significantly impacted the hotel industry’s predicted performance outcomes in Kenya. An in-depth analysis was conducted for the purpose of assessing how organizational strategies impact the steps followed by the hotel sector to ensure the success of the industry. Kenya’s Hotel performance served as the dependent variable in this study, using economic indicators to serve as a measuring instrument for financial and non-financial elements namely profitability, development of new merchandise, and the statistics of new clients. The independent variable of strategic organizational observables included training, customer focus, safety measures, and strategic planning. The research showed that using effective strategies within an organization contributes positively to the performance of hotels. A further study conducted by Wawira (2016) evaluated the connection between the marketing tactics applied by large hotels in the city of Nairobi and their performance. The four areas of marketing approaches used as the independent variable were product penetration, development of product, market development, and diversification. The success level of the hotel was gauged by looking at factors such as profitability, market share, client satisfaction, and brand equity. The research has verified that marketing tactics influenced the performance of major hotels in Nairobi, the largest area in Kenya positively. This research will investigate reasonable association between cost leadership, merchandise/service differentiation, and focus strategies with client contentment, market dominance, staff fulfillment, and the efficiency of services.
The dependent variables will be client contentment, market dominance, staff fulfillment, and the efficiency of services, while the independent variable will be cost leadership, merchandise/service differentiation, and focus strategies. Findings of Theuri et al. (2021), Hassan (2018), and Wawira (2016) serve as the underlying foundation for the aforementioned investigation. Further research has been conducted in various settings. Dawit et al. (2020) looked into the extent which Corporate Social Responsibility affects the productivity of Eritrea’s companies, both small and medium. The research results showed that Corporate Social Responsibility considerably impacts the success of the companies in Eritrea, both Small and Medium. Research performed by Samad (2018) assessed reasonable influence of environmental strategy and competitive edge on companies’ effectiveness. The investigation took a group of hotel managers in Malaysia and determined that environmental strategies and competitive advantages had a significant and beneficial effect on company performance. Hajiha (2018) conducted a study that investigates how competitive strategies influence company performance by analyzing facts sourced from several businesses detailed on the Tehran Stock Exchange in India. Findings from the researcher established that implementation of competitive approaches associate positively and substantially with the company’s goals achievement. Madhovi (2017) investigated the strong link between Customer Relationship Management (CRM) and hotels’ performances in Tshwane, South Africa, and revealed the two variables correlate positively and substantially. My current research project is based in the city of Nairobi in Kenya, whereas previous studies have been conducted in various locations across the globe.
An examination of the existing research on hotels has largely neglected to consider how competitive tactics are correlated with how five-star hotels in Nairobi gauge how good they execute their business strategy. Many studies and literature from international and local sources have looked at the achievements of hotels in general, including Total Quality management, the approach an enterprise takes to deal with current and future obstacles the company may encounter while realizing it goals for expansion, social media marketing strategies, and company resources. Other studies have examined how competitive tactics can affect a hotel’s market share, while others have focused on different contexts. In spite of this, no research has been conducted to explore how competitive policies influence the approach taken by five-star hotels in the county of Nairobi to deal with current and future obstacles the company may encounter while realizing it goals for expansion, particularly within the city area. Five-star hotels in Nairobi are facing considerable competition from other hotels in Kenya and around the world, limiting their total market share and consequently reducing their profit margins and performance (Sindiga, 2018).
Consequently, five-star hotels in the city of Nairobi must cultivate effective policies to maintain it competitiveness in the unstable hospitality sector, arming them with the necessary capabilities to enhance their success in the business. My work aims to explore, consider, and close the space by analyzing and assessing the types of competitive business tactics used as well as the tactics’ significance upon the success across five-star hotels in Nairobi, Kenya. Previous analysis has taken into account competitive and non-competitive strategies, as well as industry performance and external business conditions, to explore service sector outcomes. My research will evaluate the connection between competitive approaches and the approach Nairobi’s five-star hotels take to deal with current and future obstacles these hotels may encounter while realizing their goals for expansion by examining various factors.
1.3 Objectives
1.3.1 General Objective
This thesis project primarily purposes to investigate how competitive strategies associate with the effectiveness of five-star hotels in the city of Nairobi.
1.3.2 Specific objectives
To investigate how leadership cost tactics associate with the effectiveness of five-star hotels in Nairobi, Kenya.
Investigating the impact of various merchandise/service differentiation approaches on the functioning of five-star hotels in the city of Nairobi, Kenya.
Investigating how focus strategies correlate with the approach Nairobi’s five-star hotels take to deal with current and future obstacles they may encounter while realizing their goals for expansion.
1.4 Research Questions
1) Describe the impact of application of cost leadership approach influence over five-star hotels in the county of Nairobi, Kenya, perform?
2) establish the effect of merchandise/service differentiation tactics on the success of five-star hotels in Nairobi, Kenya?
3) The underlying connection between the focus strategies incorporated by five-star hotels in the city of Nairobi, Kenya, and the approach these hotels take to deal with current and future obstacles they may encounter while realizing their goals for expansion.
1.5 Scope of the Study
This study exclusively analyzes five-star hotels in the city of Nairobi, Kenya, and its aim is to examine how differentiation strategies, low-cost strategies, and focus strategies influence the success of these five-star hotels. The individuals in charge of the various divisions and the highest executives of the hotel will be the focus of the census survey. Information will be gathered by means of both closed and open-ended surveys. A combined quantitative and qualitative approach will be taken with a descriptive research design.
1.6 Significance of the Study
Both scholarly discourse and practical applications are bound to be implicated this research. The results of this investigation will be advantageous to a variety of people involved: Foremost, the associates and directors of five-star hotels located in the city of Nairobi; this research project proposes an analysis on the connection between the competitive approaches embraced by five-star hotels in the city of Nairobi and their accomplishment. The strategic supervisors have the blueprint for assessing the success of hotels. Afterward, businesses should be able to create applicable policies that will provide the business with an advantage over their competitors within the market.
Additionally, the research will be advantageous to other businesses and governmental bodies within the hospitality field specifically. This is because the investigation focuses on improving the practical understanding of the usage of strategies considered to be advantageous to accomplish a company’s objectives and better results. They will be able to understand the impact that tactical decisions made by different players in the market have on the success of a company. The heads of various hospitality businesses will be able to assess their success based on how well they provide services, what their market share is, how content their staff is, and how pleased their customers are. Therefore, businesses can pick and implement the right competitive strategies to enhance their success in the field. This research will be particularly valuable to academics and researchers because it will serve as a starting point for further investigations and a point of reference for any inquiries at a later date.
1.7 Limitations of the Study
Hesitation among the selected group for study in responding to the research questions out of fear that revealing details about the hotel could lead to negative consequences is expected to rise. I will make sure that the people taking part in the survey know that their responses will remain confidential and restricted to serve the intended objective of the research only. Some of the respondents may be too preoccupied with their work as managers and heads of departments to dedicate the necessary time and effort to complete the questionnaires. This investigation seeks to take on the drop and pick-later method to circumvent the restriction and give the participants sufficient time to respond to the questions accurately and to their maximum ability. The currently available research concerning the competitive strategies and accomplishments of 5-star hotels in the county of Nairobi, Kenya, is inadequate, rendering access to related and pertinent secondary data, difficult. In order to get around this restriction, a comparison was made between the study in question and related research papers in Kenya, the region, and internationally. Additionally, a comprehensive review of the literature was done, including books and reports, to determine the results of the investigation.
1.8 Organization of the Study
This investigation will have five divisions, whereby the initial division will provide a general overview of the research. In other words, it involves outlining the foundation of the study, identifying the drawback, establishing the goals, formulating research questions, defining the scope, recognizing the importance, and establishing any limitations. Chapter two will address the analysis of both theoretical and empirical research. The written works appraised in this investigation covers the research area, the identified gaps in knowledge, and the conceptual framework. The third chapter will discuss the methods adopted to conduct the investigation, compile the data, and support the facts of the examination. This entails looking into the research layout, the people being studied, the technique used to select participants, the tools utilized to gather information, testing the accuracy and consistency of the data, analyzing the data, displaying the results, and ensuring ethical standards are met.
2.0 Overview
A thorough examination of current studies on competitive strategies and how they impact organizational accomplishment will be conducted in chapter two. This examination will provide a thorough insight of the topic under consideration. This research looks at existing studies on competitive strategies and organizational performance theoretically and through empirical evidence.
2.1 Theoretical Examination
Camp (2013) explains that a theory is composed of fundamental concepts that are logically interlinked and verifiable through empirical evidence. A theoretical review framework gives an organized overview of the relevant information and facts (Marriam, 2013). The theories on which the review is founded on include: Resource-Based View Theory, Porter’s Generic Competitive Strategies, and SERVQUAL Model Theory.
2.1.1 Resource-Based View Theory (RBV)
Penrose (1959) suggests that firms can become competitive by providing exceptional value to customers through innovative methods. Wernerfelt (1984) and Jay Barney (2018) both proposed the resource-based view of an enterprise, designed to provide insights on why certain firms succeed in their operations while other firms stagnate despite functioning in the same setting. Essential contributions to the development of this theory were provided by various authors (Winter 2003; Zahra and George 2002; Zollo and Winter 2002). According to Hoskisson (2011), in the initial stages of Hoskisson’s theory of the evolution of strategic thinking, the main emphasis of a business was on internal factors. From the 1980s, the emphasis shifted from industrial to the internal structure, with the capabilities and resources remaining central to the Resource-Based View (Furrer et al., 2008). In recent years, multiple studies have cited the resource-based view of strategy (RBV) as a vital contemporary competitive advantage theory, with support from Furrer et al. (2008) and Hoskisson (2011). The resource-based view (RBV), which highlights company assets and potentials as the key to achieving superior performance, guides companies on how to take on existing assets to over compete their competitors. Organizations should direct their attention inward, analyzing their current resources and exploring ways to use them to increase profits, grow their business, and enhance performance rather than looking outward for external factors (Kozlenkova et al., 2014). Lin and Wu (2014) assert that by leveraging their existing resources and focusing on their core competencies, organizations can identify novel opportunities and create a lasting edge over the competition, resulting in sustained success. Instead of acquiring additional resources, this is the more beneficial choice for an organization. Barney (2014) stated that a company’s assets can be tangible or intangible. Tangible resources are physical strengths obtainable from the market. Still, they typically provide minimum benefits, as competitors can generally get access to the same products just as easily. Non-physical resources owned by an organization that does not have any tangible worth are referred to as intangible resources, according to Amit and Schoemaker (2013). These can include assets such as knowledge, reputation, relationships, and brand. They consist of intellectual property, brand recognition, and logos. Intangible resources such as knowledge, brand reputation, and customer loyalty can be a major factor in providing a sustainable competitive advantage, even more so than physical resources. Making the most efficient use of available resources is essential for any organization’s success and performance. For the organization to remain competitive, it must ensure that its resources are valuable and of high quality, enabling them to produce products and services that are better than those of its competitors, as well as being able to provide immediate and effective attention to customer needs and expectations; resources should be rare enough that they can only be obtained by one or a small number of organizations, and unique so that it becomes nearly impossible for competitors to imitate or replicate them (Amit and Schoemaker, 2013). An important question that has arisen due to the increased impact of the RBV is how it should be applied to the current market. According to Talaja (2012), resources that are managed by the organization can contribute to the expansion and success of a company. The RBV posits that how an institution accomplishes its goals is heavily impacted by the resources it holds and that these resources can provide a competitive edge. In other words, the RBV approach is essential to this investigation as it helps to address key questions regarding how firms in a sector differ in terms of their effectiveness and VRIO resources. In order to maintain their standing in the food and catering field, the five-star hotels in the city of Nairobi are responsible for ensuring they maximize use of their resources and take full advantage of them in light of the aftermath associated with the Corona Virus global health crisis. Therefore, this hypothesis encourages the investigation of the aftermath of VRIO assets utilization in the operations of five-star hotels in the city of Nairobi, Kenya.
2.1.2 Porter’s Generic Competitive Strategies
Porter (1985) proposed three generic strategic approaches that, if properly implemented, can result in a competitive advantage. Thompson and Strickland (2010) asserted that competitive strategies involve tactical elements of a company and its ability to adapt to customer needs and preferences, allowing them to gain an edge and remain successful in the market. Raduan et al. (2009) stressed the essence of competitive strategies for an enterprise to evaluate its current and future business progress. In addition, identify the appropriate and necessary markets to enter. Duran and Akci (2015) support that competitive strategies positively influence the organization’s success primarily under extremely uncertain conditions; in their investigation concerning the “implications of competitive strategies on an organization’s objective results among manufacturing companies in Istanbul,” They demonstrated that following these competitive strategies had a tremendously beneficial effect on an organization’s accomplishments, especially in uncertain circumstances.
For the purpose to pursue a cost leadership strategy, businesses are advised to implement stringent cost control measures and strive to reduce their operational costs in order to retail their merchandise and services at reduced consumer friendly prices (Porter et al., 2012). Cost leadership allows companies to gain an advantage over their competitors by finding ways to reduce their costs in their chosen market. In conclusion, the effectiveness and efficiency of the organization can be improved by manufacturing high-quality and standard merchandise/ services in bulk and adopting strategies that minimize production costs; this will enable the organization to maximize economies of scale and scope (Barney et al., 2014; Tanwar, 2013). Possible actions to implement the plan could include controlling portion sizes and costs in the hotel’s food and beverage services, avoiding incurring marginal costs, investing in efficient equipment and procedures, and reducing promotional and sales costs. Low operating expenses lead to substantial profit margins that are reinvested in modern infrastructure for the purpose of maintaining a competitive edge in terms of cost (Porter, 1985). The implementation of Porter’s philosophy on cost leadership approach will solidify the determination of the impact of cost economic policies on the accomplishments of five-star hotels in the county of Nairobi, Kenya. The strategy related to cost leadership is an independent variable. Porter (1985) proposed the differentiation approach, which Hansen et al. (2015) describe as a marketing approach that incorporates branding, packaging, merchandise and service sales, marketing, and advertising initiatives at the same time utilizing creativity to differentiate the product in terms of features, performance, and quality. Wesulah (2016) suggested that through a differentiation strategy, companies can create a unique and unassailable position within the market by providing high-quality, unique merchandise and services to clients. Organizations in the service industry, like hotels, can make their services more effective and efficient by properly managing their time and providing additional value to improve the customer experience and satisfaction due to enhanced performance (Tsatsoula 2018). This approach can yield many benefits for five-star hotels in the county of Nairobi, as utilizing a differentiation strategy can increase organizational success and give them an edge over competitors through the provision of unique services and merchandise, as well as by charging higher prices.
This study will then examine how such differentiation approaches impact the achievements of five-star hotels in Nairobi, Kenya. A third element of competitive strategy is Focus Strategy. Porter et al. (2012) outlines that the focus strategy involves focusing on a narrow market and offering either cost leadership or differentiation within that market rather than attempting to compete in the whole market. Therefore, businesses should tailor their products and services to particular customers and set fair prices in order to reach their desired market segments (Jiri et al., 2013). Kinyuira (2014) found that the focus strategy of targeting and concentrating an organization’s capacity and resources on a narrow market that features an inadequate presence of cost leadership and differentiation policies can be effective. Porter et al. (2012) divided the focus policy into dual distinct types: cost focus and differentiation focus. The cost-focus strategy entails becoming producers that manufacture products at minimal cost in the market and setting prices lower than competitors. Alternatively, the differentiation focus strategy involves providing unique products to a specific market segment. Through administering a focused differentiation approach, businesses can gain a competitive edge by creating merchandise and services tailored to the specific needs and wants of clients within a specific audience segment (Thompson et al., 2009). Porter (1985) suggests that organizations that employ a focus strategy are at a better position of gaining customer loyalty and loyalty, which often translate into reduced competition in their field. My research aims to look into how focus strategies correlate with the operation of institutions within five-star hotels in the city of Nairobi, Kenya, in order to establish how such strategies, impact these aforementioned establishments, Kenya is reliant on Porter’s focus strategy in order to understand how the focus strategy correlates with the accomplishments of five-star hotels in the city of Nairobi.
2.1.3 SERVQUAL Model Theory
The SERVQUAL model was developed by A. Parasuraman et al. in 1985 and is part of the gap model, which examines how clients interpret the quality of service. According to Agyei (2012), the model highlights the discrepancies between customer expectations and the service provided by an organization. This theory employs an expectations and perceptions framework to provide a basis for combining dependability, commitment, sensitivity, responsiveness, and tangibility as the aspects of quality of service in order to correspond to the distinct requirements of a particular company (Parasuraman et al., 1991). Other researchers have found that this model was created to gauge customers’ opinions regarding the quality of service brought forth by the financial industry. Despite this, over the years, other sectors, such as the tourism and hospitality industry, have adopted this model (Lacle, 2013; Njau et al., 2017). SERVQUAL scale focuses on assessing the quality of how clients receive their delivery from the customer’s perspective and gauging the actual performance against the expected, as well as identifying any discrepancies in how client deliveries are carried out (Al-Ababneh, 2017). Recently, researchers frequently use the SERVQUAL model for the purpose of assessing the standard of service delivery within industries dealing with service provision. The findings have been supported by Kennedy et al. (2011), Jemmasi et al. (2011), and Ahuja et al. (2011). Tanford et al. (2013) supported the consensus that qualifies the SERVQUAL model as appropriate for the service sector due to the services’ distinctive features like intangibility, perishability, variability, and inseparability. Thus, Negi (2014) concluded that in line with findings shared among various scholars, it is impossible to have a uniform standard for providing quality service.
Despite the fact that the SERVQUAL model has been criticized for its variability of dimensions, lack of agreement on what is expected, and difficulty in applying it to different industries, It has been widely accepted and validated by scientists and academics. Al-Ababneh (2017) argued that, despite some criticism, the SERVQUAL model provides a comprehensive and rigorous method for assessing and measuring service quality in many service-based industries. Consequently, some researchers are not content with the evidence that the rebuttals to back up the abandonment of the SERVQUAL model concept are strong. The SERVQUAL model theory is seen as a cornerstone in ensuring that organizations have proper competitive strategies in place to maximize performance, granting them a competitive advantage within the market (Sureshchandar et al., 2012). The SERVQUAL model was essential to the study because it showed how customer happiness, one of the indicators of organizational performance, is influenced by service quality. Ultimately, this will impact the success of five-star hotels in the county of Nairobi.
2.2 Empirical Literature Review
Previous research into similar or related topics, including the methods used and findings obtained, has been a key source of information. This research looks at what prior research has found regarding competitive strategies and their relationship to organizational performance, pinpointing any discrepancies and formulating a conclusion based on the findings. This research looks into cost leadership strategies, differentiating aspects, and the focus element.
2.2.1 Cost Leadership Strategy and Organizational Performance
Pearce and Robinson (2015) assert that cost leadership involves achieving and maintaining a cost advantage by utilizing exclusive operations and capacity to achieve a higher level of efficiency through reduced production costs, taking advantage of organizational size to reduce cost, high-quality goods and services, and the use of advanced technology. This approach involves utilizing low expenses, volume discounts, and leveraging a range of resources (Scheele, 2014). Low prices give a company the ability to offer the same goods or services at a competitive rate, thus gaining a sustainable competitive advantage, increasing its profits, and increasing its market share (Porter, 1985).
Gorondutse et al. (2018) conducted a survey of 83 hotel managers in Nigeria to investigate how cost-leadership influences how hotels perform. Data was collected from the survey. The managers created a network of hotels in Kano, located northwest of Nigeria. Census data was employed as an alternative to sampling. The partial least squares (PLS) method, a second-generation statistical technique, was employed for the analysis of data. Results from the analysis suggest a clear and significant positive outcome from associating the cost leadership strategy and the success of the hotel. The Linkert scale will be utilized in this study, in contrast to the partial least square (PLS) technique utilized at a previous time.
Additionally, the investigation was restricted to Nigerian hotels since their operations may be distinct from those in Kenya, requiring a separate analysis. Nzisa et al. (2017) studied how utilizing the cost leadership strategy affects the expansion of hotel chains in Kenya. A survey research design was employed in which 66 managers from 13 different hotel chains across the nation was selected using purposive sampling. Result from the survey indicated that the cost leadership strategy correlates substantially and constructively with the expansion of hotel chains in Kenya, as a large number of them employed it for a competitive advantage over other institutions through expanding their presence within the food and catering field. In contrast to this study, which looks into the competitive strategies and their significance on the success of five-star hotels in the county of Nairobi, a previous study examined how cost-leadership strategy impact hotel expansion.
Kharub et al. (2019) investigated how cost leadership strategies associate with the way Micro, Small, and Medium Enterprises (MSMEs) in India carry out their operations. Scholars conducted a survey with 245 ISO 9000-certified small and medium businesses to measure the partial mediating effects of the indirect, direct, and total impact on the hypothesis using a structural equation modeling approach. The research determined the essence of cost leadership and ongoing development through reliable information on improving and maintaining successful operations of small and medium-sized enterprises. Initially this research was focused on the ISO 9000-certified MSMEs in India to before the focus shifted fully to five-star hotels in the city of Nairobi.
Kiprotich et al. (2019) conducted an investigation to examine how cost leadership policies in procurement can be employed by manufacturing companies in Kenya to improve their performance. The study utilized an investigative approach and applied Yamane’s formula to select a group for study comprising of 264 procurement managers. A selection process involving both random and deliberate sampling was employed, and participants were chosen, with questionnaires serving as the principal data collecting instrument. The research observed the presence of a substantial and beneficial link between firms in the manufacturing industry in Kenya utilizing cost leadership procurement strategies and their performance. My study will make the most of the descriptive research design as a resultant base for the service industry, in contrast to this study which looked toward an explanatory research design.
A study by Njuguna et al. (2019) also contributes to the investigation concerning the significance of a focus strategy on the success of the operations running within Kenyan five-star hotels. The research employed a descriptive-correlative approach. A stratified simple random sample consisting of two hundred and sixty-seven managers from three- to five-star vacation and town hotels in Kenya was used to evaluate the levels of management. The research showed that having the right internal setup and adhering to a cost leadership approach could significantly improve the achievements of star-rated hotels in Kenya. This research differs from the present study as it focused on five-star hotels in the City of Nairobi and used a census study, whereas the previous research focused on hotels rated between three to five stars and obtained the sample through employing stratified and simple random sampling.
2.2.2 Differentiation Strategy and Organizational Performance
Pehrsson (2016) suggests that if a hotel establishes a distinct strategy to differentiate itself, it can successfully navigate the demanding and ever-changing competitive landscape. A differentiation strategy is preferable in a market that is not overly focused on price, is highly competitive, has customers with unique and complex demands, and where the organization has exclusive skills, resources, and capabilities that allow them to effectively meet customer needs in an unparalleled way. In other words, businesses that focus on unique aspects of their products or services that are not emphasized by their competitors will gain a competitive edge and outperform their rivals. It has the effect of increasing the company’s ability to compete on a worldwide scale (Pehrsson, 2016; Porter, 1980). Despite its importance in determining a successful and effective approach to business, there has been a lack of research regarding differentiation strategy in the hospitality sector in Kenya, and very little is known about how hotels in the country respond to a changing market in order to maximize their performance. The hospitality industry has begun to realize the importance of developing a clear vision and fulfilling the complex wants and needs of its customers. It is especially critical in Nairobi, the global center for conferences, expos, businesses, and a major tourist destination.
Primtong et al. (2018) looked at the impact that differentiating policies had on the accomplishments of hotels, as well as the moderating role that the hotel markets within the United States and China played on the influence of differentiation policies on the hospitality and tourism sector’s performance. The study revealed that employing differentiation tactics to bolster the reputation of a brand and utilizing advanced Information Technology are essential steps for hotels to achieve success in the market. This phenomenon was more pronounced in American hotels than in Chinese hotels. Since the geography and culture in Kenya are different, these findings cannot be applied to that context, which is why this study was conducted.
Bartolome et al. (2021) investigated the strategies employed by the hotel industry at the extraordinary duration of the Corona Virus global health crisis through a dynamic capabilities approach. This research looked into the rate at which hotels adapted to changes in the hospitality sector due to the Covid-19 pandemic and how it impacted the performance of hotels in Spain. The survey of 212 Spanish hotels indicated that leveraging innovation as a differentiating factor reflected a beneficial and noticeable impression on their accomplishments. The research highlighted Innovation competence to be a mediating factor, leaving the possibility of further research into other competitive strategies. This research explored the competitive strategies and the significance they had on how five-star hotels in Nairobi performed.
Kavale (2016) investigated how product differentiation strategy could affect the expansion of Kenyan Microfinance Institutions. The underlying foundation of the research entailed both descriptive as well as quantitative approaches. A selected group for study of 32 firms was chosen from a target audience of 57 firms through stratified and purposive sampling methods. Surveys were conducted to gather both quantitative and qualitative information. The research indicated that product diversification tactics demonstrated major outcomes across the expansion of Microfinance Companies in Kenya. The dependent variable in the study was corporate growth; in my study, it will be organizational performance.
Muia (2017) investigated how competitive strategies correlate with the Kenyan insurance industry’s performance. For this study, forty-seven insurance institutions in Kenya were the focus. Descriptive research design and purposive sampling served as the criteria for employees’ selection from various departments within the firms. The study evaluated the impact of employing a differentiated approach to assess how insurance companies in Kenya performed. The regression analysis indicated the presence of a strong correlation between using a differentiation policy on the operations of insurance institutions. The research by Muia (2017) contributes significantly to the study of the hospitality industry, particularly 5-star hotels in the city of Nairobi. To this end, a purposive sampling method was employed, as opposed to a census, for data collection from the target population.
Manjeet et al. (2016) explored how a competitive differentiation strategy impacts a business’s results as well as the moderating significance of quality control among Indian companies. Through the distribution of surveys to Small and Medium Enterprises located within the Indian state of Himachal Pradesh in order to gather primary data, the research failed to establish a definite association between implementing a differentiation policy and successful operations within a firm. However, Quality Management had a substantial aftermath on the relationship. This research found that Quality Management acted as an intermediary and also established a beneficial correlation following the incorporation of a Differentiation Strategy on an Organization’s operations. My research purpose is to investigate the influence of competitive strategies on the operations of an organization.
2.2.3 Focus Strategy and Organizational Performance
Krisnawati et al. (2016) also contributed to the research that investigates how competitive strategy associate with hotel performance through a study conducted in Bali, Indonesia. This research employed the Partial Least Square technique to analyze 117 data points. The results indicated that chain hotels in Bali utilized the focus strategy, a major competitive strategy that translated to a marked influence on how hotels performed. This research concentrates on Five-star hotels in the county of Nairobi in Kenya, in contrast to a previous survey study that examined the performance of Indonesian hotels. Therefore, the varying dynamics and operating conditions due to location necessitate this study.
Baraza et al. (2017) investigated the connection between the competitive approaches taken by manufacturing enterprises in Kenya and their respective performances. This study integrated a descriptive research design involving an extensive examination of the executive management team at East African Breweries Limited. The analysis of the inferential and descriptive data suggested that out of the approaches employed in the manufacturing sector of East African Breweries Limited, the focus strategy had a strong and conclusive influence on how the company achieves its objective. This research will be conducted within the hospitality industry, which has different structures and operations than those in the manufacturing industry, unlike the previous study.
Mwangi (2019) investigated how growth strategies influence the success of Nairobi’s five-star hotels. The study integrated a descriptive research design which served as a unifying factor of different facets of the analysis. Additionally, the research served a sample of ninety-five managers operating in Nairobi’s five-star hotels in Nairobi with questionnaires. The verdict suggested a clear connection between business success and the characteristics of development strategies, including market penetration, product development, and diversification. Thus, these qualities create a sustainable edge for five-star hotels to use as a competitive tactic in the ever-changing hospitality industry. The current study is centered on competitive strategies rather than growth strategies which the previous research was based on.
Kamun (2019) explored the influence that the surrounding environment has on how Nairobi Kenya food processing institutions’ competitive policies, correlate with their performance. Managers of 64 food processing companies in Nairobi were served with questionnaires for the basis of conducting the cross-sectional study. Based on the study’s findings, food processing firms in Nairobi appeared to be performing better following the implementation of differentiation, cost leadership, and focus strategies. My study will use a descriptive research design in comparison to Kamun’s cross-sectional research design. Asewe (2018) conducted a study that focused on the competitive strategies integrated in restaurants in the city of Nairobi, Kenya, which are not owned by local entities and how this hotel performed. The sample for this study was comprised of 47 restaurants that were categorized by cuisine type, such as Italian, Indian, Ethiopian, Chinese, and French. These restaurants were chosen through a stratified and purposive sampling technique. The findings of the research showed that eateries owned by international entities in Nairobi employed competitive strategies, and the Focus approach was found to have the most favorable impacts on the success of these restaurants. As part of this research, a census survey will take place within all five-star hotels in the county of Nairobi, in contrast to the previous research, which examined restaurants in Nairobi owned by abroad entities and utilized strata and purposive sampling. The foundation of both studies, however, is competitive strategies in the hospitality industry.
Ngandu (2017) conducted an investigation with the objective of gauging the tactical approaches that hotels in Thika town employ. Ngandu’s investigation also purposed to measure how these tactics influenced how the hotel performed. A review of the literature was conducted, taking into account Ansoff’s growth strategies and Porter’s model. This study utilized a descriptive research design and employed an interviewer-administered survey to collect data. The findings showed that using cost leadership and differentiation strategies had a negligible influence on the goal achievement of hotels in Thika town. The survey examined how hotels in Thika town achieve their objective, while the focus of this study was on the five-star hotels of Nairobi City. This research builds on previous studies that examined Ansoff’s growth strategies and Porter’s model but focus on Resource Based View Theory, Porter’s Generic Competitive Strategies, and SERVQUAL Model Theory.
2.3 Summary of Literature Review and Research Gaps
According to the aforementioned reviews, it is confirmed that the majority of earlier research studies’ facts findings indicated that the competitive methods used had a favorable impact on organizational performance. Table 2.1 provides a detailed overview of the findings from earlier research that have highlighted any discrepancies.
Table 2.1 Summary of Research Gaps
The Influence of Competitive Tactics on the Success of Insurance Firms in Kenya
Source: Author, (2021)
2.4 Conceptual Framework
A conceptual framework provides a visual depiction illustrating the connections between different variables and how they affect each other. In this study, three independent variables including differentiation policies, focus policies, and low-cost policies form the foundation for the evaluation of five-star hotels in the county of Nairobi. This study seeks to evaluate the accomplishments of five-star hotels in the city of Nairobi. The evaluation’s underlying foundation includes three independent variables, namely low-cost approach, focus policies, and differentiation strategies.
Table 2. 2 Conceptual framework
Independent Variables Dependent Variable
Cost Leadership Strategies
Production at a bargain
Reduced prices
Pricing
Product/Service Differentiation Strategies
Customized services
Differentiated merchandize
Reward programs
Organizational Performance
Client gratification
Market dominance
Competitive advantage position
Employee Fulfillment
Proficiency of service delivery
Source: Aberi, (2021)
Focus Strategies
Market partitioning
Expertise
3.1 Introduction
This chapter proposes an exhaustive examination of the research methodology incorporated in the research. The aforementioned entails cultivating the plan for the study, determining who the study will focus on, deciding what sample size is necessary, choosing which data-collecting methods to use, assessing the accuracy and consistency of the tools, setting out how the data will be gathered, selecting the techniques for data analysis, laying out how presentation of data will be conducted, and making sure to account for ethical considerations.
3.2 Research Design
The structure of research is a critical component. It provides sufficient details on the main steps that the research will take to reach the intended goals. This will facilitate the collection of the respondent’s insights, judgments, views, and convictions about the topic being studied, as well as help to form conclusive results and effectively analyze both quantitative and qualitative information. The focus of the research includes the impact that competitive strategies have on how five-star hotels in the city of Nairobi perform.
3.3 Target Population
People, elements, or items that align with the criteria for a specific group being observed or examined make up the population. They can be sampled to stand in for the larger population (Cooper & Schindler, 2014). This study was conducted with all eleven five-star hotels that had been registered with the Tourism Regulatory Authority (TRA) as of the initial three months of 2020. Two five-star hotels in the county of Nairobi were forced to shut down amid the Covid-19 outbreak of 2020. Table 3.1 displays the affected establishments.
Table 3. 1 Five-star hotels in Nairobi City County
Source: (TRA Report, 2020)
3.4 Sampling Design and Procedure
Saunders et al. (2012) define census as a means of collecting data and investigation based on which researchers employ members of phenomena or groups in a population to collect contributions to subcategory groups from a population for study. The researcher will use census methods to ensure that all members of the limited and manageable-sized population are included in the analysis. Kothari and Garg (2014) similarly argued that a census is suitable when the size of the population is manageable. This research utilizes a census approach to investigate all General Managers and five Heads of Departments working within the nine open 5-star hotels located in the city of Nairobi. The result is a sample size of a hundred and eight Managers from the nine hotels’ various departments, as indicated in Table 3.2.
Table 3. 2 Distribution of the target population
3.5 Data Collection Instrument
Data gathering involves certain steps taken to acquire information from members of the population being studied in an orderly fashion so as to adequately address the questions posed by the research (Cooper & Schindler, 2014). A survey will be conducted in which participants will provide their answers to predetermined questions with the intention of collecting data. The questionnaire will be designed to include both open and close-ended questions, and a five-point Likert scale ranging from 1 (strongly disagree) to 5 (strongly agree) will serve as the guide to record the responses. The managers in the chosen sample will be surveyed using the drop-and-pick method. The survey is designed to have five divisions, namely A, B, C, D, and E. The focus of Section A will includes the participant’s basic facts and the company’s general overview, section B will investigate cost leadership and performance; Section C will explore product/service differentiation and performance; Section D will look into focus strategy and performance and section E will analyze the performance metrics. Questionnaires serve as the ideal path for gathering data for this research due to their affordability, the anonymity they offer, the ability to quickly get a large amount of data from participants, and the decreased likelihood of introducing any bias.
3.6 Validity and Reliability Testing
The research necessitates testing for the questionnaire’s effectiveness and for correctness of the data collected. The aforementioned will be tested by having the participants’ rate three four-star hotels. They will also provide feedback on how long it took to finalize the entire questionnaire and how reliable the data emerged. This research will incorporate findings as per the pilot study to refine the questionnaire’s ultimate draft to be used in the research, ensuring any errors or weaknesses are corrected. After running a trial of the questionnaire, any problems or mistakes discovered were fixed before using it for the official study.
3.6.1 Validity Testing
In other words, validity measures the degree at which a study error-free evaluates the topics that the study was mapped out to assess. Cresswell (2014) also confirms that validity testing is a way to ensure reliability and assess how factual the data collected emerged compared to what was expected. The validity of the questionnaires will undergo thorough assessment by an accomplished field expert and their supervisor, using tests of face, content, and construct validity. This includes reviewing the wording, structure, formatting, order, clarity, and appropriateness of the questions and instructions. The respondent’s comments will be taken into consideration, and any necessary changes or amendments will be made. The results from the tests of validity for the questionnaires will be excluded from the final assessment. Investigating the instruments’ accuracy will allow the researcher to decide if the selected measuring device consists of the necessary and representative number of elements to examine the concept being researched.
3.6.2 Reliability Testing
According to Crano and Brewer (2015), reliability can be measured by the consistency of results obtained using a measuring instrument across multiple trials. Thus, this research will use Cronbach’s Alpha to gauge the questionnaire’s consistency. Cronbach’s Alpha is a count of the reliability of a selection of items, showing how strongly the items in the set are related to each other (Sekaran & Bougie, 2016). This reliability of Cronbach’s Alpha method is dependent on whether the reliability coefficient is greater or equal to 0.70, which is the accepted level for this research.
3.7 Data Analysis and Presentation
Cresswell (2014) outlined that the process of data analysis entails examining, transforming, and interpreting information in order to uncover useful insights that can inform decision-making. Before analyzing, the data collected, will undergo thorough checks for inconsistencies such as omissions, accuracy, errors in responses, and completeness, among others, then adjusted to make sure it is effective and consistent and further enhanced using coded figures so that it is categorized into meaningful numbers. The research will employ both descriptive and inferential statistics. In addition to analyzing quantitative data with descriptive statistics (e.g., means and standard deviation), the Statistical Package for Social Sciences (SPSS) will also examine the same data and present it in a tabulated format, bar charts, and graphs. Additionally, the qualitative data gathered will be assessed through content analysis. One-way ANOVA at a 95% confidence level will be used to assess if the realization of competitive strategies translates to a reasonable impact on organizational performance. Pearson’s product-moment correlation (r) will serve as a measure for the strength and type of correlation. Utilizing the Coefficient of determination (R2) to quantify the level of variability is the approach this research will take to assess how competitive policies impact organizational accomplishments. The F-ratio in the ANOVA table is used to determine the probability of a deviation from the line of best fit. After evaluation, the F-ratio generated necessitates a p-value of below 0.05 to qualify for consideration as statistically significant at a 5% rate. This analysis will employ Multiple Regression to examine the correlations between the different variables being studied. The equation for multiple regression analysis is as follows:
Y = α + β1X1 + β2X2 + β3X3+ ε
Where.
3.9 Ethical Considerations
The researcher will obtain permission to obtain data from five-star hotels and the National Council for Science and Technology Institute (NACOSTI). The questionnaires will not identify the sampled hotels by their actual names but rather assign them a code to ensure confidentiality. The researcher will obtain permission from the hotel managers before distributing the survey to the participants and ensure that all information related to the hotel is kept confidential and secure. The participants will be sent a formal document outlining the purpose of the research and the protections for any data that is collected. The research questionnaire will be carefully designed to ensure that the information gathered matches the aims of the research and that the questions asked remain non-personal for the purpose of protecting the confidentiality a well as anonymity of the selected group of study. The researcher is responsible for being accurate in their analysis, presentation, and reporting of the facts and statistics of the study, as well as giving appropriate credit to other authors and scholars by using the APA Referencing System when citing works used in the investigation.
Introduction
After collecting data from the departmental heads of the selected hotels, the researcher proceeded to coding and analysing it. The statistical software called SPSS was employed to complete this process. The main objective was to come up with statistical outcomes that could be used to determine strategies used to improve the performance of Five-Star Hotels in Nairobi City, Kenya. A reliability test was carried out where the researcher intended presented the value of the Cronbach alpha to show the reliability of the data. Demographic statistics were used to show the distribution of the respondents based on the demographic traits. Other statistical tests carried out were descriptive statistics, analysis of the correlation values between variables used, and regression analysis. The regression analysis was meant to give values for t-statistics to assess whether the create null hypothesis was rejected or accepted.
4.1 Reliability Statistics
Table 4. 1 Cronbach’s Alpha
The reliability testing was based on the interpretation of the Cronbach’s alpha. A study carried out by Tavakol and Dennick (2011) indicated that the statistical test refers to a mechanism for assessing reliability of the selected data by comparing the level of shared variance or existing covariance of the items being used. Cho and Kim (2015) and Warrens (2015), on the other hand, define Cronbach’s alpha as a statistical tool that is best known for its potential to determine the internal consistency of data. As a result, the value produced can be used to determine the extent to which the researcher can rely on the set of data for conducting their study. In this case, the standardised value for the Cronbach’s alpha was 0.67. According to Warrens (2015), a value that ranges between 0.6 and 0.8 signals the existence of highly consistent data in terms of the existing internal structures. This is because it can be used to show that the internal consistency of data is within the acceptable range (Warrens, 2015). In this case, the Cronbach’s alpha value helped to show that the data being used could be relied upon in the study.
4.2 Demographic statistics
The section involved interpreting statistical values about the demographic values of the respondents such as their gender and age. See tabular and graphical representations.
Table 4. 2 Gender
There was 61.0% (36) males and 39.0% (23) females. This meant that the researcher interviewed more males than females. The statistical outputs were further represented schematically using a bar graph.
Figure4.1 Gender
Table 4. 3 Age
Individuals with 41-50 years recorded the highest population compared to those in other population bracket. There were 29 (49.2%) individuals within this age bracket compared to only 4 (6.8%) who were below 30 years. Those falling under 51-60 years and 31-40 years were 19 (32.2%) and 7 (11.9%) respectively. This meant that most of the department heads were middle-aged adults. The age distribution conformed with Kotur and Anbazhagan’s (2014) assertions that most organisations prefer having older and experienced individuals in various leadership positions. This is because such individuals are considered to be at a better position of offering advice to the rest of the employees in the workforce (Kotur & Anbazhagan, 2014). The Five-Star Hotels in Nairobi seem to have followed the same trend by entrusting most of their older workforce to take up different departmental leadership positions. The age distribution was further represented schematically as indicated below.
Figure 4. 3 Age
Table 4. 4 Education Level
There was an equal number of respondents with diploma or who were undergraduates. Each this category had 16 (27.1%) respondents with those with a college certificate following closely at 23.7% (14). There was still an equally large number of respondents with post-graduate educational qualifications. There were 9 (15.3%) respondents with either a master or a Ph.D. degree. Only 4 (6.8%) respondents were high school leavers. The population distribution in terms of education level helped to show that the selected Five-Star Hotels valued having departmental heads who were educated and profession in their anticipated roles. The trend coincided with Yildirim et al.’ (2016) assertions that five-star hotels’ employees are usually highly educated. According to Yildirim et al. (2016), such employees are entrusted with the mandate of offering world-class hospitality services to their highly-esteemed customers who comes from different global regions. The selected hotels in Nairobi seemed to have followed suit by making sure only professionals headed their different departments. The statistical outputs were further represented using a bar graph as indicated below.
Figure 4. 4 Education level
Table 4.5 Working Period
Those with the longest working periods were more than those with shorter working periods. For example, there 22 (37.3%) and 19 (32.2%) of respondents with 8-10 years and over 10 years of working experiences respectively. There was an equal number of those with 2-4 years and 5-7 years of working experiences. Each of these categories had 7 (11.9%) respondents with those having less than 1 year of working experienced coming at a distance last with only 4 (6.8%) respondents. The statistical outcomes proved that most of the selected Five-Star Hotels in Nairobi had installed those with longer working experiences as the departmental heads. According to Otado (2022), most of hotels in Nairobi have entrusted those with longer working experiences as the departmental heads. This helped to affirm why the current trend was observed. To help create a more vivid picture, the researcher used a bar graph as indicated below.
Figure 4. 5 Working Period
Table 4.6 Departments
There was equal representation in terms of department with only the finance and procurement having 11 (18.6%) respondents. The other departments had equal number of respondents. They had 12 (20.3%) respondents. This helped to show that there was fair distribution of respondents based on the department they represented, thus, enhancing the reliability and validity of the anticipated outcomes. The figure 4.5 was used to create a vivid picture of the derived statistical values.
Figure 4. 6 Departments
4.3 Descriptive statistics
Table 4.7 The competitive strategies used and their contributions to improving performance of a hotel
The participants were also required to give their opinions regarding the current competitive strategies. They were expected to answer whether the adopted strategies were vital for enhancing the hotel’s performance. It was observed that 72.9% (43) of the hotel leaders interviewed agreed that the adopted strategies played a vital role in improving the performance of their hotels. However, a significant percentage of the respondents (27.1% or 16 individuals) did not agree at all with the opinion. They held the opinion that the adopted competitive strategy did lead to the eventual improvement of the performance of the hotel. In overall, this meant that most of the employees believed in the competitive strategies of the company. The trend led to the need for analysing the key competitive strategies employed by the Five-Star Hotels in Nairobi.
Table 4.8 Cost leadership strategy
To determine the extent to which the selected hotels in Nairobi were based on cost leadership strategy, the researcher used different metrics. One of the metrics aimed at examining the extent to which lo-cost suppliers were utilized. Upon conducting an in-depth analysis of the collected data, the researcher made a special observation that 54.2% (32) of the participants used agreed that they utilized low-cost suppliers. Another 19 respondents, 32.2%, respondents agreed with the same statement. The outcomes resonated with the Ragor’s (2014) findings that most the five star hotels in Nairobi outsource for their products by liaising with reliable and entrusted suppliers. According to Ragor (2014), the strategy works well, as it helps to lower the overall operation costs, as such hotels are shielded from incurring additional costs during times of scarcity of a commodity. This explains why only 1 individual disagreed while other 2 disagreed with the statement that their hotels made use of low-cost suppliers. when required to explain how cost-leadership strategy benefitted the hotel, a sizeable number of the respondents underscored that they on agreement with their suppliers to maintain constant flow of a product at a certain prices and over a given period. Such an agreement helped to shield them against the predatory prices for most of the agricultural commodities, especially when they are scarce.
Table 4.9 Product/service differentiation
In an attempt to investigate the product/service differentiation strategy used, the researched proposed a question that aimed at investigating whether the selected hotels had unique and diverse offerings. This was one of the unique metric that could help to create a clearer picture regarding the product or service differentiation strategy used. The findings revealed that 52.5% of participants used agreed in totality with the presented statement. Another significant percentage of 35.6% of the respondents also agreed with the same with only a small percentage (2.4%) of the respondents not agreeing at all with the same statement. The outcomes coincided with Jawabreh’s (2014) findings, which revealed that five star hotels attempts to create tailor-made or customised hospitality services in an attempt to enhance their customer relationship management skills. In another study conducted by Maoto (2017), it was observed that five star hotels in Nairobi attempted to diversify on their products and services to enhance their operations, financial management, and innovativeness. Thus, it was agreed that product and/or service differentiation was a vital strategy used in the selected Five Star Hotels in Nairobi. The results were further demonstrated schematically as indicated below.
Figure 4. 7 Unique and diverse offerings
Table 4.10 Focus Strategy
The researcher also examined whether the selected hotels used focus strategy. To assess this, they aimed at determined whether these hotels offered categorised pricing based on the value of the product or service. Here, 49.2% of the respondent strongly agreed with the assertion with some significant others (35.56%) agreeing with the same. Only 3 individuals disagreed while the rest (6 or 10.2%) remained neutral. According to Agušaj et al. (2017), big hotels offers varying pries for their rooms, as a strategy for attracting visitors with different purchasing powers. Agušaj et al. (2017) note the approach helps to improving the booking rate of these hotels. As a result, this helps to explain why categorised pricing remains as an important strategy for big hotels. This was a trend that was also confirmed by the respondents used in the study.
Table 4.11 Measures of organisational performance
The researcher also attempted to investigate how the performance of these hotels could be measured. This study used one of the metrics used to determine this to show how the performance could be measured. When required to show whether they had enhanced their customer satisfaction through their loyalty program, 52.5% (31) of the respondents strongly agreed with the statement with 33.9% (22) others also agreeing with the same sentiments. Only 2 (3.4%) respondents did not agree at all with the statement. The observed trend could be explained by Alzoubi et al.’ (2021) findings that most of five-star hotels in United Arabs Emirates (UAE) offer loyalty programmes to help attract and maintain a steady flow of customers. Top among these strategies entails offering of discounts to return customers to win their loyalty (Alzoubi et al., 2021). Therefore, this helped to explain that the selected hotels in Nairobi were not left behind in terms of creating world-class loyalty programs that could hotel to improve customer satisfactions. The statistical outcomes were further represented using a bar graph, as indicated below.
Figure 4. 8 Customer satisfaction through our loyalty program
4.4. Correlation analysis
Table 4.12 Correlation analysis
The research did correlation analysis to show the association existing between the organisational performance and the three independent variables. It was identified that a strong positive correlation value of 0.78 at a p-value of 0.000 existed between hotel (organisational) performance and the underlying cost leadership strategy used. It meant that most of selected hotels in Nairobi were set to experience improved performance by using various cost leadership strategies. An equally larger positive correlation value of 0.58 was also recorded between hotel performance and focus strategies used. This meant that the choice of focus strategies used was equally likely to create a larger positive impact on the performance of the selected hotels in Nairobi. On the other hand, a weak albeit positive correlation value of 0.34 was recorded between product/service differentiation and the performance of the selected hotels in Nairobi. It meant that the product differentiation strategy was equally liable for improving the performance of the selected hotels even though in small ways.
4.5 Regression analysis
Table 4.13 Regression statistics
A regression test was carried out through further analysis to help estimate the extent to which each of the selected variable impacted on the performance of the selected hotels in Nairobi. The statistical tests were also meant to assess whether the proposed hypotheses were to be accepted or they could be as well rejected. The tests focused on evaluated costs leadership strategy variable. It was observed that a t-value of 9.01 at a p-value of 0.000 was recorded. This meant that the population mean was 9.01 points further away from the respective null hypothesis mean. What this meant was that a positive relationship was proved to exist between the adopted costs leadership strategy and the eventual performance of the selected hotel in Nairobi City. A standardised value of the beta was recorded to be 0.74. This proved that an absolute unit change in the cost leadership strategy used triggered subsequent 0.74-units change in the absolute value of performance of the selected hotels in the same direction.
The product/service differentiation strategy was determined to have a t-value of 2.37 at a p-value of 0.001. this means that the population mean was 2.37 points further away from anticipated mean of the null hypothesis. As a result, it was concluded that a positive association existed between hospitality services’ differentiation strategy and the eventual performance of the selected hotels in Nairobi. The standardised coefficient of beta was recorded to be 0.23. The statistical results also meant that an absolute unit change in the product differentiation strategies triggered subsequent 0.23-unit changes in the outright value of the hotel performance. This change was direct, which meant that it occurred in the same direction.
The third test entailed using focus strategies and the next independent variable. This had a t-value of 2.18, which meant that the population mean was 2.18 points away from the anticipated mean of the null hypothesis. This led to the acceptance that a positive connection existed amongst the focus strategies employed and the eventual performance of hotels. A standardised coefficient value of beta was 0.02. This meant that an absolute change by a one unit of the focus strategies culminated to an only 0.02-unit change in the eventual value of the performance of the selected hotels. The change was direct, which meant that a rise in the focus strategies used led a subsequent (but very miniature) rise in the performance of the selected hotels, and vice versa.
4.6 General discussions of the derived findings
Summary of the methodology and findings
The research was about examining how competitive strategies associated with the effectiveness of five-star hotels in the city of Nairobi. To complete this study, the researcher had to earmark their population of interest, which was composed of five-star hotels in Nairobi City. Some of the hotels that the study focused on were Radisson Blue Hotel, Villa Rosa Kempinski, and The Sarova Stanley. Sankra Hotel, The Boma Nairobi Hotel, and Crowne Plaza Nairobi Airport Hotel were some of the other hotels covered. The remaining ones were The Tribe Hotel, Hemingway’s Nairobi, and the renowned Dusit D2. Furthermore, the researcher went ahead to reach out departmental heads of these hotels. The key departments targeted general management, sales and marketing, food and beverage, front office, and finance and procurement.
A total of 59 department heads were selected using purposive sampling method. It was worth indicating that the sampling technique was deemed valuable in ensuring that only employees who headed key departments in the selected hotels were deemed eligible for the study. This helped to reduce time that could have otherwise been used to create the appropriate sample size. The appropriate ethical procedures such as the provision of a consent letter from the respective higher learning institution was done. This was meant to underscore the purpose of the study, thus, gaining confidence of the target participants. Since study was based on mixed-method approach, a survey was conducted whereby the target respondents were offered questionnaires to fill information. These questions were based on both closed-ended, as well as, open-ended questions. The closed-ended questions were deemed suitable for collecting qualitative data. Such data was analysed qualitative by identifying key themes that emerged, thus, helping augment what was identified via the quantitative analysis. The closed-ended questions were used to collected quantitative information. The answers given by the target respondents were coded to facilitate the eventual analysis using a statistical software. As a result, the coded data was inserted in SPSS to facilitate deriving the anticipated outcomes. Eventually, the derived results were interpreted. It is based on these derived results that the eventual discussion was based.
Discussions based on the findings
It was determined there existed a strong positive association between cost leadership and the eventual effective performance of the Five-Star Hotels in Nairobi. The statistical analysis revealed that a robust direct relationship between the two factors existed. The affiliation between the two factors could be explained by information derived from several scholarly sources. For example, a study conducted by Pearce and Robinson (2015) asserts that cost leadership involves achieving and maintaining a cost advantage by utilising exclusive operations and capacity to achieve a higher level of efficiency through reduced production costs. such organisations also take advantage of organizational size to reduce cost, maintain high-quality goods and services, and the use of advanced technology (Pearce & Robinson, 2015). The revelation means that cost leadership approach involves utilising low expenses, volume discounts, and leveraging a range of resources (Scheele, 2014). Low prices give a company the ability to offer the same goods or services at a competitive rate, thus gaining a sustainable competitive advantage, increasing its profits, and increasing its market share (Porter, 1985). This information could be further supported by outcomes of further statistical analysis, which indicated that introduction of cost leadership strategies led to an even larger proportionate change in the performance of the Five-Star Hotels in Nairobi. Briefly, this meant that there was a more established and impactful directly relation between the two factors. This could be further explained using the Resource-Based View (RBV) Theory. According to Penrose (1959), the RBV theory suggests that firms can become competitive by providing exceptional value to customers through innovative methods. Another study suggests that resource-based view of an enterprise is designed to provide insights on why certain firms succeed in their operations while other firms stagnate despite functioning in the same setting (Jay Barney, 2018). Key among the factors that were deemed to enhance success of the Five-Star Hotels in Nairobi related to the creation of strong financial and internal management structures that could enhance securing basic materials of production at low costs. Most of the respondents pointed out that their respective hotels had established links with key suppliers, thus, helping minimise their production costs. This facilitated such organisations in offering hospitality products and services at affordable prices, thus, attracting more potential clients. Consequently, this helps to rubberstamp the existence of a positive relationship between cost leadership strategies used and the eventual performance (effectiveness) of the selected Nairobi hotels.
It was also observed that mechanise (product)/service differentiation approaches had positive influence on the functioning of the Five-Star Hotels in the city of Nairobi. The descriptive analysis showed that most of the selected hotels in Nairobi offered unique and diverse products and services to their clients. These hotels embraced innovativeness such as developing hospitality services for improved customer interactions. For example, one of the respondents indicated that Radisson Blue Hotel had developed a mobile application to improve customer experience when booking. This was among the product differentiation approaches that made a difference in the performance of Five-Star Hotels in Nairobi City. This also explained why most the statistical outcomes indicated that the differentiation approach had a considerable direct influence on the performance of the selected hotels in Nairobi. Porter’s’ Generic Competitive Strategies Concept can be used to explain how this relationship exists. According to Porter (1985) and Thompson and Strickland (2010), the concept involves the use of tactical elements of a company and its ability to adapt to customer needs and preferences. The use of such strategies paves the way for such entities to gain an edge and remain competitive and successful in the market (Porter, 1985). Porter’s (1985) assertions are further echoed by Duran and Akci (2015) who underscore that competitive strategies positively influence the organization’s success primarily under extremely uncertain conditions. This helps to affirm why the use of product/service differentiation approach was identified to be a perfect move for bolstering the competitiveness and the eventual success of the Five-Star Hotels in Nairobi.
The focus strategies were identified to have a direct relationship with the operations undertaken by the Nairobi’s Five-Star Hotels. Even though the strategies were identified to have very minimal impact on the performance of these hotels, it was still appreciated that they led to an improvement of the performance of these entities when introduced. The influence of direct and positive influence of the focus strategies on the hotels’ performances could be further expounded using SERQUAL Theory. The theory underlines the discrepancies existing between customer expectations and the service provided by an organisation (Agyei, 2012). This theory employs an expectations and perceptions framework to provide a basis for combining dependability, commitment, sensitivity, responsiveness, and tangibility as the aspects of quality of service in order to correspond to the distinct requirements of a particular company (Parasuraman et al., 1991; Agyei, 2012). Other researchers have found that this model was created to gauge customers’ opinions regarding the quality of service brought forth by the financial industry (Lacle, 2013; Njau et al., 2017). The assertion could be further explained the statistical results that indicated that most of the Five-Star Hotels in Nairobi offered categorised pricing based on the value of the product or service. Creating of different room booking prices played a crucial role in attracting a wide range of customers, as such a focus strategy covers covered potential clients of different economic statuses. The example helped to explain why focus strategies were still deemed to have some positive influence on the performance of selected hotels in Nairobi, Kenya.
The positive influence of such focus strategies were also identified to have some indirect influence on the plans put in place by the Five-Star Hotels in Nairobi in dealing with current and future obstacles they may have encountered while realising their expansion goals. When asked about any other plans put in place by these hotels to gain a competitive edge most of the respondents underscored that their respective hotels have come up with strategies for addressing future concerns probably to be raised by their potential and target clients. The need for having a proper future plan, as part of the focus strategy, was, therefore, seen as a mechanism for enabling the selected hotels deals with the future obstacles likely to be faced afterwards. This coincides with Hill and Brierley’s (2017) assertions that indicated that organisations need to have steady and reliable future plans. This is seen as part of ensuring that customers’ satisfaction is guaranteeing even in the unforeseeable future (Hill & Brierley, 2017). Hennig-Thurau (2000) also agrees with Hill and Brierley’s (2017) assertions by further underlining that laying in place the proper future plans helps to win the customers’ confidence, thus, creating a stable market niche. This explained why focus strategies put in place by the Five-Star Hotels in Nairobi created a platform for these entities to plan how to handle unforeseen obstacles. This also helped the selected hotels to realise their future expansion goals more effectively.
5.1 Conclusion
The main objective of thesis project was to investigate how competitive strategies associated with the effectiveness of five-star hotels in the city of Nairobi. To attain this aim, the researcher had to develop three key specific objectives. The first one delved on investigating how leadership costs associated with the effectiveness of the selected hotels. Upon critically analysing the collected data using qualitative, as well as numerical techniques, it was identified that that costs leadership had a very huge influence in improving the effectiveness of the five-star hotels. The strategy was identified to be highly crucial for affirming the competitiveness of this hotels. Most of the interviewed organisational leaders agreed that they had to rely on some key suppliers to help management the prices of their inputs. This was considered a form of cost leadership that, eventually, improved profitability of the selected hotels in the Kenyan capital. The second specific objective was about investigating the impact of various services and products differentiation approaches on the functioning of these hotels. Again, it was affirmed that applying various product differentiation strategies helped to create an appealing image to the target clients. This strategy proved effective in enhancing satisfaction of the clients, thus, increasing chances of winning their loyalty. A case example of the use of a booking app was deemed to be a game change, as it led to the automatic winning of the clients’ confidence and loyalty. Thus, this led to the eventual growth of growth in the number of visitations on the selected hotels. The third objective aimed at investigating how focus strategies related with the approach the selected hotels took to deals with both current, as well as future obstacles they may have encountered while striving to attain their expansion goals. It was noted focus strategies had minimal albeit positive impacts on the selected hotels. Since they had positive impacts on the performance of these hotels, they were considered to be at the centre of the five-star’s hotels expansion plan. Since the three specific objectives were met, it was concluded that the applied competitive strategies had a direct relationship with the effectiveness of the selected hotels in the Kenyan capital.
5.2 Limitations of the study
One of the key limitations of the stud was related to was related to the sample size used. The researcher used a sample size of 59 participants. Therefore, they appreciated the fact that the sample size had the potential of adversely affecting the credibility of the findings. To mitigate negative influence of this limitations, the researcher ensured that only those in leadership positions of the five-star hotels were deemed eligible to take part in the study. They researcher was assured of getting the most accurate responses from these participants, as they acted as representatives of huge pools of employees. Furthermore, the researcher also gave the participants the option of answering both closed-ended, as well as open-ended questions. The approach helped to collected diverse ranges of responses. As a result, this helped to maintain integrity and the eventual reliability of the findings.
The study also had limited time. The researcher appreciated this fact by ensuring that they came up with mechanisms to save on the limited time in whichever way possible. One of these strategies entailed focusing on a small but a more appropriate sample size. This helped to save time that could have been used to interview a huge number of respondents. Similarly, the study targeted hotels that were within Nairobi. This ensured that it was easy to physically visit them, thus, saving on time. The respondents were also given the option of answering the provided questionnaires online. This also helped to save on time. Such saved time was allocated to more demanding activities such as data analysis and discussions. As a result, the researcher was able to strategise on how to minimise adverse effects associated with the time limitation, thus, ensuring that the produced results were still reliable and credible.
5.3 Implications for practice
The outcomes of the study are anticipated to provided practical and viable management solutions to not only five-star hotels but in other global hospitality organisations. For example, hotel leaders can use the outcomes to stress on the need for maintain strong link with their most promising suppliers. This will be a very crucial step towards ensuring that unnecessary costs incurred as a result of relying of multiple suppliers for the supply of raw products have been eliminated or minimized. The strategy will lead to the automatic improvement in the profit margins of the company.
The hotels can also draw lessons from the findings of the study to stress on the need for having viable mobile applications to help improve their interactions with the target and potential clients. The outcomes of the study revealed that product differentiation was one of the key strategy that helped to maintain customer loyalty. On a similar note, these findings will also make such hotels see the need of having a pool of tech-savvy employees. This will help to improve their digitalization, thus, improving harnessing of more customer potential globally. Briefly, the results of this study have unlimited implications for practices that help to improve the overall efficiency in the performances of organisations in the hospitality industry.
Future researchers should ponder on introducing similar study in a different geographical scope such as targeting five-star hotels in American or China. The approach will help to assess whether there will be any discrepancies on the influence of the competitive strategies used by such hotels and those in Nairobi, Kenya. Therefore, such a study will assist in attaining results that can be put into application by all five-star hotels to attaining a globally-competitive marketing and management plan.
It would also be significant to try out establishing a similar study in a different sector of tourism such as the air transport. Again, this will help to offer a diverse view of how application of competitive strategies influences the performances of the organisations in the hospitality industry. As a result, the outcome of such a study can be used to create a unified competitive plan for all organisations in the hospitality industry.
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APPENDIX I: RESEARCHER’S INTRODUCTORY LETTER
To Whom It May Concern
Dear Sir/Madam,
RE: REQUEST TO FINALIZE THE RESEARCH QUESTIONNAIRE
My name is Lorna Aberi, a student from Kenyatta University undertaking a Master of Business Administration herein carrying out research on “Competitive strategies and organizational performance of five-star hotels in Nairobi city county, Kenya.” This research’s outcome will relay requisite insights to the hotel in formulating better competitive strategies as approaches that will contribute to competitiveness and improved overall performance in the hospitality industry. I therefore humbly request for your consent and endorsement to access and collect data in your hotel, this will therein facilitate in the completion of my study.
Attached below is a research questionnaire with the intent of collecting relevant data regarding your hotel in relation to the topic of my study. The information that will be relayed will be maximized solely for academic objectives. Besides, I would like to guarantee ultimate confidentiality in regards.
In this regard, I kindly request for your support, besides your cooperation in completing the sections relayed below objectively. Your assistance will be highly appreciated.
Yours faithfully,
Lorna Aberi,
0713136781
Kenyatta University.
Questionnaire
This questionnaire has been divided into five parts. Section A captures general information about the respondent. Section B captures information about cost leadership. Section C focuses on product/service differentiation. Section D addresses the focus strategies. Section E deals with the measures of organization performance.
N.B: The information contained in this questionnaire will be treated in strict confidence. Your assistance completing this questionnaire is highly appreciated.
Section A: General Information
Gender
Male [ ] (b) Female [ ]
Age Bracket
Below 30 [ ] (c) 41-50 [ ]
31-40 [ ] (d) 51-60 [ ]
Highest level of education qualification
High School [ ] (d) Undergraduate [ ]
Certificate [ ] (e) Postgraduate [ ]
Diploma [ ]
Name of your hotel ……………………………………………………………………………………………….
Length of period working with the hotel
Less than a year [ ] (d) 8-10 years [ ]
2-4 years [ ] (e) Over 10 years [ ]
5-7 years []
Your department
General manager [ ] (d) Sales and marketing [ ]
Food and beverage [ ] (e) Finance and procurement [ ]
Front office [ ]
Section B: Cost Leadership
This section delves into the core aspects of cost leadership and its significance. The table below has statements that reflect various aspects of this strategy. On the scale of 1-5, please rate the extent to which you concur with each of the statement. Consider 1 = strongly agree, 2 = agree, 3 = neutral, 4 = disagree, and 5 = strongly disagree.
Are there challenges faced by your hotel while implementing this strategy?
Yes [ ] (b) No [ ]
How would this strategy benefit improve the hotel’s profit and general performance?
………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………
Section C: Product/Service Differentiation
The statements below reflect the adoption of a product/service differentiation strategy. On the scale of 1-5, please chose a response that aligns with your hotel’s implementation of these indicators. Consider 1 = strongly agree, 2 = agree, 3 = neutral, 4 = disagree, and 5 = strongly disagree.
If yes, what are they?
………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………
How would your hotel make better use of this strategy?
Section D: Focus Strategies
The statements below reflect on various aspects of focus strategies. On the scale of 1-5, please chose a response that aligns with your hotel’s implementation of these indicators. Consider 1 = strongly agree, 2 = agree, 3 = neutral, 4 = disagree, and 5 = strongly disagree.
Highlight any other aspects of focus strategy employed by your hotel to gain a competitive advantage.
Section E: Measures of Organization Performance
The statements below reflect on the measures of organization performance. On the scale of 1-5, please chose a response that aligns with your hotel’s implementation of these indicators. Consider 1 = strongly agree, 2 = agree, 3 = neutral, 4 = disagree, and 5 = strongly disagree.
In your opinion, have the current competitive strategies improved the hotel’s performance?
Thank You for Your Response
APPENDIX III: FIVE-STAR HOTELS IN NAIROBI CITY COUNTY
APPENDIX IV: TIME PLAN
Data Collection
Final Project Report Submission
APPENDIX IV: RESEARCH BUDGET
THE AUTHOR
Lorna Aberi: A Comprehensive Profile
Lorna Aberi is an emerging figure in the field of business & strategic management and hotelier, known for her dedication to implementing relevant strategies to ensure growth in the work environment. This essay provides an in-depth look into his academic background, research contributions, professional experience, and media presence.
Academic Background
Lorna pursued Masters in Business Administration (Strategic Management option) at Kenyatta University in Nairobi, Kenya. This was growth decision after she pursued her Bachelors Degree in Hotel Management at Moi University in Eldoret, Kenya. During her time at Moi University, Lorna demonstrated leadership qualities, serving as the class representative for the BHM Class from 2019 to 2022.
Research Contributions
Lorna’s research interests are geared towards positive contributions to hospitality industry, focusing on hotel management in Kenya. One of her notable works is a project titled “To Establish the Determinants of the Types of Restaurants Found Within Eldoret Town”. In this study, Lorna examined how various restaurant attributes like theme & décor, types of menus and atmosphere are used by customers before making their informed decisions. The research concluded that restaurant attributes determine the types of restaurants found within Eldoret town for customers ranging from young people, tourists and sports persons to families. The author recommended on how hospitality operators can use the restaurant attributes to identify, categorize and map their restaurants and thus attract suitable customers. On the other hand, customers acquire insight on factors that enhance their choice of a restaurant.
Lorna has also done another project “Competitive Strategies and Organizational Performance of Five-Star Hotels in Nairobi City County, Kenya” that focuses on evaluating the connection between competitive approaches and the techniques & factors used by the Nairobi’s five-star hotels and improving the practical understanding of the usage of these strategies considered to be advantageous to accomplish a company’s objectives and better results. The research concluded that the applied competitive strategies such as the leadership, product differentiation and focus strategies have a direct and positive relationship with the effectiveness of the selected hotels in Nairobi city.
Professional Experience
Lorna is the School Administrator at the Nairobi Waldorf School Trust, Karen Campus. She is a dedicated employee who integrates her customer service and strategic management knowledge in providing effective, helpful, and high-quality service to all the school’s stakeholders. Lorna plays a vital role in ensuring that the school operates efficiently and efficiently, maintains a conducive learning and working environment to the students, parents, teachers and non-teaching staff, and supports both the pedagogical and administrative functions of the school. She is also in-charge of the school admissions, serves as a member of the management team, a coordinator between the pedagogy and support departments to ensure the school is able to nurture free individuals who are balanced who are capable of creative and critical thinking.
Lorna has previously worked in the Hotel sector as a receptionist and Guest Relations Officer at the Hiton Hotel, Nairobi. Lorna was responsible for creating a welcoming and efficient experience for guests during their stay and to ensure high standards of customer service are achieved in line with the hotel’s vision, mission and core values. The duties ranged from reservations management, check-in and checkouts, proactively responding to enquiries, addressing and solving guests’ issues/complaints, liaison with other hotel departments to ensure customer satisfaction, billings and payments, feedback management, guests’ database management among others.
Media Presence
Lorna maintains active presence in social media platforms. She is on Instagram “lornaaberi”, Facebook as “Lorna Aberi” and Pinterest under the username “aberilorna,” where she has created and saved various pins. Lorna is a member of the Institute of Customer Experience Kenya.
Conclusion
Lorna Aberi is an all-round individual with a multifaceted professional dedicated to advancing strategic professionalism, administration and hospitality and research. Her academic pursuits, combined with practical working experience positions her as promising contributor in her work environment. Through her experience and qualifications, she helps in providing clear direction, solve problems, and optimize resources to achieve long-term goals and objectives.
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