The Joint Effect of Competitive Strategies, Business Environment and Corporate Image

The Joint Effect of Competitive Strategies, Business Environment and Corporate Image

Updated: May 6, 2018

on Performance of Large Manufacturing Firms in Kenya




Ndung'u Consolata

Dedan Kimathi University of Technology, P. O. Box 657, 10100, Nyeri, Kenya, consolatathuranira@gmail.com, Tel. No: +254 717281549

Ogutu Martin

School of Business, University of Nairobi, P.O. Box 30197, 00100 Nairobi

Yabs John

School of Business, University of Nairobi, P.O. Box 30197, 00100 Nairobi

Njihia James Muranga

School of Business, University of Nairobi, P.O. Box 30197, 00100 Nairobi



PDF: Download Full-Text Pdf

DOI: http://dx.doi.org/10.31014/aior.1992.01.02.15


Abstract

The main objective of the study was to determine the joint effect of competitive strategies, business environment and corporate image on the performance of large manufacturing firms in Kenya. This study was guided by positivist philosophy and adopted a descriptive cross-sectional survey on the population of 139 large Manufacturing firms. By using a questionnaire data was collected. 75 questionnaires were returned, and only 72 could be used. Percentages, mean scores and standard deviations were some of the descriptive statistics used to describe the findings. Correlation and regression analysis were used to test the hypothesis. The results of the joint effect of competitive strategies, business environment and corporate image on the performance of large manufacturing firms in Kenya were statistically significant. The regression coefficient statically revealed that competitive strategies, business environment, and corporate image influenced the performance of large manufacturing firms in Kenya. The combined influence of the three variables (competitive strategies, business environment, and corporate image) was greater that the predictor influence of variables on the performance of large manufacturing firms in Kenya. The study concluded that the large firms stand a better position of achieving good performance if they pay attention to all predictors than when they focus on all variables.

Introduction

Competition is the order of today business environment. Firms in developing countries are exposed to intense competition due to globalization. Firms irrespective of their size have to deal with the declining market share, and therefore competitive strategies are critical to all firms. All firm managers endeavor for better performance than yesterday, which is very challenging due to the dynamic environment. This intensity in competition has driven firms to remain relevant by continuously adapting and renewing and recreating organizational capabilities due to competition. This dynamism in the environment entails firms to constantly monitor the environment they operate in with a view to crafting competitive strategies to make them unique from competitors in the eyes of their customers and various publics. Various stakeholders perceive the organization using different perspectives. It's the work of the firm managers to continuously understand the various stakeholders perceptive because each is concerned primarily with a different facet of its operations. Maintaining a positive corporate image is vital for a sustainable competitive advantage and eventually firm performance. Just as firms compete for customers so, do they compete for a good reputation.


In Kenya, large manufacturing firms occupy a very important place due to their contribution to the economy in terms of the number of people they employ and contribution to the GDP. The implementation of competitive strategies by respective firm managers ensures that firms achieve a competitive advantage and finally achieving organizational performance. Various authors have defined competitive strategies: Johnson and Scholes (2005) to the scope and direction of an organization for a long period. Thompson & Strickland (2005) refers competitive strategies as approaches and moves a firm has to attract new customers and withstand competition so that a firm can gain a competitive advantage. According to Porter (2008) strategy is building defenses against competition where forces are weak. From this definition, strategies aim at differentiating firm from competitors in various forms in order to have a sustainable competitive advantage in the long run.


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