Influence of Cost Leadership Strategy on Performance of Deposit Taking Savings and Credit Cooperative Societies in Uasin Gishu County, Kenya

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