Positioning Strategies And Growth Of Hotels In Lamu County, Kenya

ABSTRACT

In this era of technology, business competes in a complex and challenging environment that is being transformed by various factors such as uncertain and frequent changes of the use of information technologies and globalization. Thus, the achievement of desired growth is a major pre-occupation of managers in the slow growth and competitive markets, which characterize many sectors of the economy. In Kenya and many other developing countries, the hospitality industry has been an important agent of economic growth due to its relationship with the tourism industry. However, there is a great deal of competition among the organization in this industry. For a firm to remain competitive, it has to have distinctive capabilities and position itself strategically in the market. Despite this, research on positioning strategies little has been researched on concerning positioning strategies and its influence on the growth of hotels in Kenya. This study aimed at investigating the influence of positioning strategies on the growth of Hotels in Lamu County, Kenya. The specific objectives of the study were to examine the influence of product differentiation, cost leadership strategy, focus strategy and strategic alliance strategies on organizational growth. The study was anchored by resource based view theory, market based view theory and open systems theory. This study employed a descriptive survey research design. The target population of the study included the top level managers, middle level managers and supervisors in the 38 licensed hotels in Lamu County. The study used proportionate stratified sampling where the Hotels were classified into 5 Stars, 4 Stars, 3 Stars and 2 Stars and simple random sampling method was used to select the respondents. The sample size was 133 respondents. Questionnaires were used as data collection instruments. Descriptive statistical analysis such as mean and standard deviation were used to analyze quantitative data. Multiple regression analysis was used to show the relationship between variables. The study established that product differentiation strategy, cost leadership strategy, focus strategy and strategic alliance strategy had a positive significant on organizational growth. The study concluded that product differentiation in the hotel industry is the key to sustaining long-term business growth and success. Cost leadership strategy enables Hotels to become the low cost producer in the Hotel industry. Focus strategy enables that Hotel industry build strong relationships within each target market which makes them competent to new entrants. Strategic alliance strategy adds complementary resources and capabilities, enabling Hotels to grow and expand more quickly and efficiently. The study recommended that the hotel industry should ensure that they are significantly better at a product attribute that other Hotels are providing by doing the underlying activities differently. The hotels should explore models of costing that best fit their operations such as activity-based- costing or performance-based costing so as to enable them identify the most optimal cost strategy fit that they can implement in the long run to achieve the desired growth. Due to the unpredictable and dynamic markets, the Hotel industry should focus on wider fraction of clients but being specific to any one geographical area. The hotel industry should define expected outcomes from the relationship for all the parties in the strategic alliance. Define and document the elements provided by each party, and the benefits a successful alliance brings to each and identify the results that will cause the alliance to be most beneficial for your business and define the structure and operating issues that need to be addressed to achieve these results.