Effect of business level strategies on performance of solar industry in Kenya.

Abstract

Globalization has led to intense competition in various industries and the world at large thus there is need for well thought strategic management practices to keep organization afloat and up on their feet in the market. Various level of management strategies such as corporate level strategies, business level strategies and functional level strategies can be employed. For this particular study that focuses in the solar industry market in Kenya business level strategies will be given emphasis; these strategies include focus strategies, cost leadership strategies and differentiation strategies. Many people in Kenya has no access to electricisince they live offgrid this has made Kenya a good market for solar product and thus 22 solar companies has been established in kenya however 4 of these companies has since folded dup due to various reasons including performance and management reasons like sustainability, social impact, gender equity, brand image and sometimes stiff competition. Various studies done by various authors has been done regarding business level strategies however there is no such studies linking it to solar industry in Kenya. The strudy focuses on internal resources to give these organizations competitive advantage over the competitors in the Industry hence resource based theory suits the study as a theory guiding it. The study used descriptive research design coupled with census survey to administrer questionnaires on 126 respondents to investigate the relationship between business level strategies and performance of solar industry in kenya. The target population are 7 heads of department (Human Resource, Sales, After sales, Marketing, Finance, Training and the Informational Technology departments) of 18 companies who are still afloat in Kenya resulting in 126 rewspondents. (7*18=126). It was evident from the results that all model coefficients were significant at 0.05. The findings also shows that all the model coefficients, which include: Cost leadership (B = 0.139, p <.05); Differentiation strategy (β = 0.197, p <.05); Focus strategy (B = .437, p <.05) had positive significant effect on performance. The unstandardized B coefficient of cost leadership shows that unit change in the level of cost leadership strategies causes a 0.139 units increment in organisational performance level and the change is significant as shown by the p-value. A unit change in Differentiation strategy and Focus strategy causes 0.197 and 0.437 units increase in organisational performance levels of solar industry. The findings shows that all the model coefficients; Cost leadership, Differentiation strategy, Focus strategy had positive significant effect on performance. This suggests that the selected determinants have an effect on the performance of Pay-As-You-Go solar firms in Kenya. The firms should also establish more strategic partnerships and good relations for better prices and hence reducing procurements costs, it also recommended that, in order to intensify the effect focus strategy on organisational performance, hence need to focus on providing superior customer service, investing in research and development, striving to have an outstanding strong image and reputation for quality innovation.