INFLUENCE OF COMPETITIVE STRATEGIES ON PERFORMANCE OF SECOND HAND VEHICLE DEALER FIRMS IN NAKURU EAST SUB-COUNTY, KENYA

Abstract

The second hand vehicle dealership in Kenya has continued to be an extremely competitive sector. In the context of performance, the sector is considered to account for over 70% of the vehicles in Kenyan roads. This study sought to examine the influence of competitive strategies on performance of the second hand vehicle dealers in Nakuru East Sub County. The study was guided by the following competitive strategies that is customer focus strategies, cost leadership strategies, product differentiation and payment terms. The study uses the Michael Porter generic strategies model and operating cycle theory. This study utilized a correlational research design. The correlational research design was used to establish the link between the independent variables and dependent variable. This design is applicable in this study in the context that it sought to examine the influence competitive strategies on performance of second hand vehicle dealers in Nakuru East Sub County, Kenya. In this context, the competitive strategies and performance are the independent and dependent variables respectively. The variables are naturally occurring in nature and would be described as they are on the ground in an ex post facto manner. The target population of this study was the 85 senior managers and owners of the second hand motor dealers in Nakuru town. This study adopted a census method to pick sample members. The census method involves picking of all the population members to be used in the study due to ease of data collection and the small number of the population size. Therefore, this study used 85 respondents for the study. The study found that a multiple correlation coefficient (R) of 0.955 was achieved for the study. This revealed that there was a strong correlation between the observed values and the predicted values for performance. The study further found that 91.2 percent of the total variance in performance is explained by the combined effect of customer focus strategies, cost leadership strategies, product differentiation and payment terms. The achieved results revealed that for customer focus influence on performance had β1=0.227, t=4.446 and p value =0.000. These results were tested on whether they were statistically significant at 5% level of significance with a p value of 0.000 indicating that presence of a statistically significant relationship between customer focus and performance of the second hand vehicles dealers. The achieved results revealed that for cost leadership strategies influence on performance had β2= 0.352, t= 8.511and p value =0.000. These results were tested on whether they were statistically significant at 5% level of significance with a p value of 0.000 indicating that presence of a statistically significant relationship between cost leadership and performance of the second hand vehicles dealers. The study examined regression coefficients of the product differentiation influence on the performance. The achieved results revealed that for product differentiation strategies influence on performance had β3= 0.206, t= 6.008 and p value =0.000. The results thus indicated that a unit increase in product differentiation strategies would result into 0.206 increase in performance of the second hand vehicle dealers with the other variables kept constant. The achieved results revealed that for payment terms strategies influence on performance had β4= 0.224, t= 4.916and p value =0.000. These results were tested on whether they were statistically significant at 5% level of significance with a p value of 0.000 indicating that presence of a statistically significant relationship between payment term strategies and performance of the second hand vehicles dealers.