INFLUENCE OF COMPETITIVE STRATEGIES ON FIRM PERFORMANCE IN THE TELECOMMUNICATION INDUSTRY: A CASE STUDY OF TELKOM KENYA IN NAKURU EAST SUB COUNTY
CHUMBA, PAUL KIPTERER
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The telecommunication sector plays a critical role in communication, contributing to the Gross Domestic Product (GDP), creation of economic opportunities through mobile money agents, facilitating economic activities, facilitating the provision of mobile money and internet services. The firm performance of the telecommunication companies are thus important in Kenya's context. However, comparing the firm performance of Telkom Kenya Limited with other mobile phone service providers, Telkom Kenya Limited has performed relatively low compared to its peers as evidenced by data from communication authority of Kenya. Competitive strategies have been noted as key drivers of firm performance around the world. This study sought to examine the role of competitive strategies on the firm performance of Telkom Kenya. In particular, the study examined the influence of differentiation strategy, cost strategy, and focus strategy on firm performance of Telkom in Nakuru. The study was guided by three theories; Bowman's Strategy Clock Theory, Institutional Theory, and Michael Porter Theory. This study utilized a correlational research design. The target population of this study is 56 Telkom Kenya staff involved in marketing, finance and operations aspects of the Telkom offices at Nakuru East Sub County. The study used the census method in selecting sample members. The sample size of the study is therefore 56 Telkom Kenya staff based in Nakuru East Sub County offices. The study used structured questionnaires for the purposes of the data collection process. A pilot study was undertaken in Naivasha offices of Telkom Kenya. The validity of the instrument in this study was examined using the content validity of the instrument. Reliability of the research instrument in this study was examined using the Cronbach alpha coefficient. Data was coded into the SPSS software in preparation for data analysis. The data from the questionnaire was analysed using descriptive and inferential statistics. The statistics to be undertaken include frequencies, chi-square, and linear regression analysis. The competitive strategies were found to have positive correlations amongst themselves. The study achieved a correlation coefficient R of 0.945 indicates that there is a strong and positive correlation between the independent variables (competitive strategies) cumulatively and the dependent variable (firm performance). The results of this study indicate that the achieved coefficient of determination stood at 0.894 indicating that the competitive strategies influenced 89.4% of the change in the firm performance. In respect to the influence of the differentiation on the firm performance, the results indicated the achieved results of Beta (β1) = 0.304, t = 5.886, and Sig= 0.000 indicating a positive statistical significance between the differentiation and firm performance. In respect to the influence of the cost strategy on the firm performance, the results indicated that the achieved results of Beta (β2) = .449, t = 9.427, and Sig= 0.000 indicated that there was a positive and statistically significant relationship between cost strategy and firm performance. In respect to the influence of the focus strategy on the firm performance, the achieved results of Beta (β3) = .302, t = 6.516, and Sig= 0.000 indicated the presence of statistically and positive relationship between focus strategy and firm performance. These results indicated that cost strategy had the most significant influence on the firm performance at Telkom Kenya followed by focus strategy, and differentiation strategy respectively. The study recommended that the competitive strategies such as focus strategy, differentiation strategy and cost strategy should be implemented continuously by the organization. The study further recommends that Telkom Kenya as a firm should place its emphasis on cost strategy as it had the most influence on the firm performance at the organization followed by focus strategy, and differentiation strategy respectively.