The Influence of Franchising on Competitiveness of Hospitality Firms in the Hotel Industry in Kenya. A Survey of Selected Hotels and Restaurants in Mombasa County

Abstract

Franchising is a system whereby a franchisor organization distributes products and services while involving a franchisee organization which uses the name of its brand and the concept of business in return they pay a fee.It is a strategy that has been implemented to enter into alien markets among other strategies. This study focused on the influence of franchising on competitiveness of hospitality firms in the hospitality and hotel industry in Kenya. Specific objectives in this study was to examine the influence of brand power on competitiveness of hospitality firms in the hotel industry in Kenya and to find out the influence of innovation on competitive of hospitality firms in the hotel industry in Kenya. The Astroff matrix and Schumpeter’s theory on innovation are the theories in which this study was based. They explain product development and innovation in business. The researcher used case study as the research design and collected of data so as to obtain information on the respondents in this study and consequently addressing the variables within this particular study. The population targeted in this study was all franchise holders in the Hotel and Service Industry operating in Kenya. However due to limited time the researcher chose Mombasa County to represent target population. This research used simple random sampling so as to obtain a samples. A pilot study was done on 4 hotels which weren’t admitted into the actual sample for validation of the questionnaires. The study was contingent on primary data collected with the aid of the questionnaire method. The reliability test was conducted using Cronbanch Alpha Test at 0.7 minimum level and the lowest level achieved was 0.679. The collected data was analysed and interpreted through use of SPSS Version 20. The descriptive statistics were utilized in the description of the characteristics of the population in the study in the data summary. The influence of franchising on competitiveness in hospitality firms in the hotel industry in Kenya was examined by regression analysis. The results showed that the correlation between overall brand power and competitiveness was positive ( r = .391; p= .000; N=100) . Innovation and competitiveness also had a positive significant correlation (r = .268; p = .007; N = 100). Principally, the study concluded that franchising highly influences competitiveness of hotels. This showed significantly positive influence of franchising on the competitiveness of the hospitality firms in the hotel industry in Kenya. Consequently, its recommended that firms in hotel industry invest in franchising with strong brands as one of the strategies of enhancing their competitiveness.

DOI: 10.7176/EJBM/15-9-03

Publication date:May 31^st 2023