Cost leadership Strategy and Performance Supermarkets in Kenya
Abstract
The business environment is often turbulent and chaotic in nature, and this calls for rapid response strategies to ensure the sustainability of the business in the competitive environment. This study aimed to examine the influence of cost leadership strategy on the performance of supermarkets in Kenya. This study adopted a descriptive cross-sectional survey design to examine the influence of cost leadership strategy on organizational performance of supermarkets in Kenya. A representative sample of five counties—Nairobi, Kiambu, Mombasa, Nyeri, and Machakos—was selected based on retail performance indicators. The unit of analysis comprised supermarkets within these counties, while primary data were collected from a total of 270 respondents comprising one senior management staff and two other employees using structured questionnaires. The collected data was processed by checking for errors and completeness, editing, coding, and entering them directly into SPSS software for analysis. It was found that cost leadership strategy had a significant and positive relationship with organizational performance r=0.361, P=<0.001<0.05. Additionally, cost leadership strategy exhibited a positive and significant effect on performance (B = 2.156, Wald = 14.137, p < 0.001) with its adoption increasing the odds of high performance by 8.633. This implies that those supermarkets that embrace cost leadership strategy have higher chances of having higher firm performance as compared to those supermarkets not using the strategy for positioning. The study concludes that if there is a good and functional cost leadership strategy in place, this will ensure operational efficiency, a function of improved performance. The study therefore recommends that leadership for supermarkets in Kenya should ensure they design a good, effective, and functional cost leadership strategy so that organizational performance can be enhanced. Key Words: Cost leadership, Strategy, Organizational Performance, Supermarkets