Adoption of Digital Technologies as a Driver for Cost Leadership Strategy in Tour Firms within Nairobi City County, Kenya

Abstract

Digital technologies play a major role in reducing the cost of operations in tour firms. The main focus of the study was to find out the adoption of digital technologies as a driver of cost leadership strategy in tour firms within Nairobi City County.  The specific objective was to investigate the influence of mobile applications on cost leadership strategy in tour firms in Nairobi City County. Embedded research design was applied in the study. The study adopted the null hypothesis that mobile applications had no statistically significant influence on cost leadership strategy in tour firms within Nairobi City County. The study population was 278 tour firms obtained from the Kenya Association of Tour Operators (KATO) list where a sample of 164 tour firms were selected through the application of Yemane’s (1967) sample size formula. 10 tour firm mangers were selected for interviews. Systematic random sampling was utilized for the determination of the sample size of 164 tour firms. Semi-structured questionnaires and interview schedules were utilized as data instruments. Questionnaires were filled by tour consultants while interviews were conducted with tour firm managers. 133 respondents filled out the questionnaires representing 81% response rate while 7 interviewees were conducted representing 70% response rate. Both descriptive and inferential statistics were used during data analysis. The study utilized both ANOVA and multiple regression tests to test the hypotheses, and influence between the adoption of digital technology and cost leadership strategy. The results of the R Square equals 0.919 therefore revealing that 91.9% of cost leadership is attributed to mobile applications. The study confirmed there was a statistical significance (p =.000) between mobile applications and cost leadership. Mobile applications as a digital technology tool accounted for a positive significant increase (B = 637) in cost leadership strategy. The study concluded that there is a positive strong influence between the adoption of mobile applications and cost leadership strategy. The study recommends that tour firms should fully adopt digital technologies to maximize cost control, minimize marketing costs, and promote operational efficiency