COMPETITIVE STRATEGIES AND ORGANISATION PERFORMANCE A REVIEW OF LITERATURE REVIEW

Abstract

Competition among the organizations in Kenya has necessitated examination of the generic strategies employed by firms to remain competitive. The business environment in which organizations operate is dynamic and turbulent with constant and fast paced changes that often render yester-years’ strategies irrelevant. To obtain firm performance within the scope of sustainable competitive advantage, decisions on shaping firm’s competitive strategies are one of the main issues for managers under firms’ business level strategy. Because, the formulation and completion of competitive business strategies that will improve performance are one of the competent methods to achieve firm’s sustainable competitive advantage. The study is guided by the following specific objectives; review the existing theoretical literature on linkage between competitive strategies and organizational performance; review the existing empirical literature on linkage between competitive strategies and organizational performance; establish the emerging knowledge gaps reviewed on competitive strategies and organizational performance; to propose a conceptual framework for link between competitive strategies and organizational performance. The study is guided by the following theories, Porter's Theory of Competitive Advantage, Resource Based View theory, Theory of Strategic Balancing and mathematical theory. Most of the empirical studies done has operationalised competitive strategies in three different strategies. These includes differentiation, market focus and cost leadership. Performance has been operationalised into the following parameters; productivity, return on assets, return on equity and service delivery. This paper therefore proposes that competitive strategies adopted in an organisation determine the level of organisation performance. It is indeed empirically proven that competitive strategies do not only gives a firm competitive advantage which makes it outperform competitors in the industry but also go a long way in enhancing organizational performance. Based on these views this paper proposes that; competitive strategies utilization in an organisations needs continuous and sustained supervision, improvement and adequate funding in view of it importance’s. The study aimed at finding out relationship between competitive strategies and organizational performance. Based on the empirical findings the study made the following conclusion. This study confirms that many organisations employs cost leadership, differentiation and focus strategies either simultaneously or at the exclusion of others in order to be competitive and improve their performance. The finding of this study thus adds to the existing literature on critic of Porter’s assertion that the generic strategies are mutually exclusive hence partially supporting the notion of Porters’ exclusive application of competitive strategies in order to achieve superior performance.