Competitive Strategies and Performance of Kenya Airways Limited in Nairobi County, Kenya

Abstract

Kenya Airways has experienced significant financial losses over a prolonged period, which has led to the requirement of a government bailout and the adoption of a restructuring initiative. Kenya Airways is a major player in the Kenyan aviation sector but has struggled to stay profitable compared to Ethiopian Airlines. Ethiopian Airlines has reported consistent profits for several years, in contrast. Kenya Airways is adopting competitive tactics to improve its performance, but there is a dearth of empirical research on the subject. The objective of this study was to analyse the impact of competitive strategies on the performance of Kenya Airways. The purpose of the study was to examine the impact of differentiation, cost leadership, focus, and innovation on the performance of Kenya Airways Limited. This study was anchored on the following theories: porter’s generic strategies model, dynamic capabilities, resource-based view, strategy-structure-performance, and balanced score card. This study employed a descriptive inquiry approach. The focus group for the study was comprised of a total of 180 staff members of Kenya Airways Limited. The sample size consisted of 124 employees, who were selected using a basic random sampling technique. A semi-structured questionnaire was used to collect primary data. This research assessed the accuracy of the research tool by utilizing the viewpoints of experts through a content validity method. Cronbach's alpha co-efficient was utilized to evaluate the dependability of the research instrument, and a minimum threshold of 0.7 was established. Data was analysed using descriptive statistics using means and standard deviations and inferential statistics. The study made use of correlation analysis and multiple regression analysis to deduce connections among different variables. Differentiation strategy had a positive and significant effect on performance of Kenya Airways of (β= 0.513, p < 0.05). Cost leadership strategy had a positive and significant effect on performance of Kenya Airways of (β=0.458, p < 0.05). Focus strategy had a positive and significant effect on performance of Kenya Airways of (β= 0.540, p < 0.05). Innovation strategy had a positive and significant effect on performance of Kenya Airways of (β=0.651, p < 0.05). The study concluded that differentiation strategy improves the performance of Kenya Airways. Cost leadership strategy helps to improve the performance of Kenya Airways Limited. Focus strategy enhances performance of Kenya Airways Limited and innovation strategy helps to improve performance of Kenya Airways Limited. The study recommended that the company should continue to offer unique features that sets it apart from other airlines. The company should operate efficiently in order to keep costs low.