Competitive Strategies and Performance of Construction Companies in Kisumu County, Kenya

Abstract

Competitive strategy is intended to grant an organization the ability to outperform its rivals and gain market leadership. Research on performance implications of competitive strategies is vast strategic management but without much consensus. This study set out to establish the competitive strategies adopted by construction firms in Kisumu County and to determine their influence on the companies’ performance. Through a cross sectional descriptive survey, data were obtained from a randomly drawn sample of eighty four (84) construction companies using a structured questionnaire and analyzed using multivariate regression analysis. The findings of the study indicate that the construction firms adopted cost leadership, product differentiation, growth strategies, and grand strategies. The study reports strong positive correlation between competitive strategies and performance as well as statistically significant influence of competitive strategies on performance. Grand strategies account for a larger variation performance followed by generic and growth strategies respectively. Independently, differentiation strategy accounted for a larger proportion of unit change in performance followed by market penetration, strategic alliances and innovation in that order. Out of the study results, the firms are advised to aggressively adopt a mix of competitive strategies. The study’s findings support the postulations of game theory and the strategic conflicts model as anchoring theories. Arising from the study’s limitations, suggestions for further research have been advanced along different lines.