Abstract
Savings and Credit Co-operative Societies (SACCOs) in Kenya quite like any other commercial establishments encounter significant difficulties that are presented by ever-changing and intensely aggressive market conditions. Nevertheless, for SACCOs to contest confidently and remain relevant and competitive, they are obliged to recognize and follow relevant competitive strategies as a fundamental determinant for exceptional performance. This study analyzed the influence of cost leadership strategy on performance of deposit-taking SACCOs at branch network level in Uasin Gishu County. Porter Generic Strategies Model guided this study. For the accomplishment of the study objective, it was crucial to analyze the relationship between different variables connected with the research in relation to the performance of deposit-taking SACCOs hence positivism philosophy and cross-sectional descriptive survey research design were employed. Target population consisted of 277 officials from the deposit-taking SACCOs. Yamane (1967) formula employed to determine expected sample size of 164 participants. A five-point Likert scale questionnaire was adopted for primary data collection. Reliability of the instruments was resolved through the internal consistency where Cronbach's Alpha correlation coefficient of 0.7 and above was considered acceptable. Data were descriptively analyzed using means and standard deviations, and inferentially by correlation and regression analysis to measure strength and direction before fitting the Multiple Linear Regression model. The study found that there is a statistically significant positive influence of constructs of cost leadership strategy (p<0.05; R2= 0.678) hence the study rejected the null hypothesis. The study therefore concluded that there was a statistically significant influence of cost leadership strategy on performance of deposit-taking SACCOs and therefore, recommended that deposit-taking SACCOs in Uasin Gishu County should devise cost leadership strategy for wide markets using cheap sourcing, reduced operational costs and economies of scale to achieve superior performance. Keywords: Cost Leadership Strategy deposit-taking SACCOs’ performance, Uasin Gishu, Kenya DOI: 10.7176/EJBM/13-20-01 Publication date: October 31 st 2021
Highlights
Background of the StudyIn cooperative movements, intensified competition frightens the attractiveness of the movement and lessens its superior performance
Cost leadership strategy five-point Likert summated scale was used in the analysis
5.2 Conclusion The study concludes that cost leadership strategy, a Porter’s generic strategy used in wide market, can significantly help improve performance of deposit-taking Savings and Credit Co-operative Societies (SACCOs) since it had significant influence on performance of deposit-taking SACCOs
Summary
In cooperative movements, intensified competition frightens the attractiveness of the movement and lessens its superior performance. This exerts pressure on cooperatives to be proactive and to formulate flourishing competitive strategies that take pleasure of strengths and opportunities, overcome, or neutralize weaknesses and threats (Johnson & Scholes, 2012). Escalated competition between SACCOs, commercial banks, and microfinance institutions (MFI) has intensified the rate of rivalry. This frictionless commerce tends to raise customers’ expectations about products and services and makes them more susceptible to switching from one service provider to the other weakening the active membership of an organization (Barney, 2011). Though business situations are different; there is no strategy that is best fit for all companies (Allen & Helms, 2006), a firm adopts the strategy that satisfies it fully and proceeds forward to pursue it
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