IDEAS home Printed from https://ideas.repec.org/a/bjc/journl/v10y2023i8p38-52.html
   My bibliography  Save this article

Relationship Between Cost Leadership Strategies and Performance of Domestic Airline Firms in Kenya

Author

Listed:
  • Daniel Kiprotich Kiprop

    (The Catholic University of Eastern Africa)

  • Sr. Dr. Lucy Wanza

    (Lecturer, The Catholic University of Eastern Africa)

  • Mr. Robert Githinji

    (Lecturer, The Catholic University of Eastern Africa)

Abstract

The business strategy or combination of strategies adopted by a firm has to fit the firm’s resources and competencies in addition to being responsive to the environmental dynamisms to achieve the desired competitive advantage. The objective of the study was to investigate the relationship between cost leadership and organizational performance of domestic airlines in Kenya. The study employed a correlational research design. The study targeted all the 48 domestic airline firms licensed and operating within the Kenyan borders. The study setting was the three airports in Kenya including JKIA, Wilson Airport, and Moi International Airport Mombasa. From each of the airlines, the target was to engage utmost five individuals holding management positions within the airline management structure. Stratified random sampling technique was used to arrive at a representative sample where Slovin’s formula was used. Primary data was collected using structured questionnaires while secondary data was gathered by use of a document analysis guide. A response rate of 90.23% was realized. Most of the respondents (44.85%, N = 87) were from airline with 11 to 20 staff. In terms of flight types, 40.72% (N = 79) indicated they offer non-scheduled flights. On nature of services 51.55% (N = 100) of the respondents indicated they offer both passenger and cargo hauling flights. Majority held that revenue for the company has been on the rise (60.3%, N = 117) and customers served increased annually comparing 2018 and 2019 (44.3%, N = 86). Pearson correlation test showed a weak positive correlation between cost leadership strategy and revenue generated by the airlines (N = 194, p = 0.005, r = 0.199 at 95% CL) and same to volume of cargo hauled (N = 194, p = 0.000, r = 0.255 at 95% CL) for the period of 2018 and 2019. Regression analysis revealed that cost leadership strategy had a 4% and 6.5% influence on revenue and volume of cargo hauled respectively implying Cost leadership is associated with performance of domestic airline firms in Kenya. The study recommends a longitudinal study in diverse industries to ascertain the relationship more so in the post Covid -19 pandemic.

Suggested Citation

  • Daniel Kiprotich Kiprop & Sr. Dr. Lucy Wanza & Mr. Robert Githinji, 2023. "Relationship Between Cost Leadership Strategies and Performance of Domestic Airline Firms in Kenya," International Journal of Research and Scientific Innovation, International Journal of Research and Scientific Innovation (IJRSI), vol. 10(8), pages 38-52, August.
    • Handle: RePEc:bjc:journl:v:10:y:2023:i:8:p:38-52
    as

    Download full text from publisher

    File URL: https://www.rsisinternational.org/journals/ijrsi/digital-library/volume-10-issue-8/38-52.pdf
    Download Restriction: no
    File URL: https://rsisinternational.org/journals/ijrsi/articles/relationship-between-cost-leadership-strategies-and-performance-of-domestic-airline-firms-in-kenya/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Vincent P. Crawford, 2016. "New Directions for Modelling Strategic Behavior: Game-Theoretic Models of Communication, Coordination, and Cooperation in Economic Relationships," Journal of Economic Perspectives, American Economic Association, vol. 30(4), pages 131-150, Fall.
    2. Kaya, Gizem & Aydın, Umut & Ülengin, Burç & Karadayı, Melis Almula & Ülengin, Füsun, 2023. "How do airlines survive? An integrated efficiency analysis on the survival of airlines," Journal of Air Transport Management, Elsevier, vol. 107(C).
    3. Heinz, Stephan & O’Connell, John F., 2013. "Air transport in Africa: toward sustainable business models for African airlines," Journal of Transport Geography, Elsevier, vol. 31(C), pages 72-83.
    4. Yue Meng-Lewis & Donna Wong & Yupei Zhao & Gavin Lewis, 2022. "Understanding complexity and dynamics in the career development of eSports athletes," Sport Management Review, Taylor & Francis Journals, vol. 25(1), pages 106-133, January.
    5. Karl-Heinz Leitner & Stefan Güldenberg, 2010. "Generic strategies and firm performance in SMEs: a longitudinal study of Austrian SMEs," Small Business Economics, Springer, vol. 35(2), pages 169-189, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. O'Connell, John F. & Avellana, Raquel Martinez & Warnock-Smith, David & Efthymiou, Marina, 2020. "Evaluating drivers of profitability for airlines in Latin America: A case study of Copa Airlines," Journal of Air Transport Management, Elsevier, vol. 84(C).
    2. Cinzia Battistella & Maria Rosita Cagnina & Lucia Cicero & Nadia Preghenella, 2018. "Sustainable Business Models of SMEs: Challenges in Yacht Tourism Sector," Sustainability, MDPI, vol. 10(10), pages 1-20, September.
    3. Alhamzah Alnoor & Khai Wah Khaw & XinYing Chew & Sammar Abbas & Zeeshan Zaib Khattak, 2023. "The Influence of the Barriers of Hybrid Strategy on Strategic Competitive Priorities: Evidence from Oil Companies," Global Journal of Flexible Systems Management, Springer;Global Institute of Flexible Systems Management, vol. 24(2), pages 179-198, June.
    4. Yi Liu & Wenqian Li & Yuan Li, 2020. "Ambidexterity between low cost strategy and CSR strategy: contingencies of competition and regulation," Asia Pacific Journal of Management, Springer, vol. 37(3), pages 633-660, September.
    5. Gavin Reid & Zhibin Xu, 2012. "Generalising Gibrat: using Chinese evidence founded on fieldwork," Small Business Economics, Springer, vol. 39(4), pages 1017-1028, November.
    6. Marc Dressler, 2023. "Generic strategic profiling of entrepreneurial SMEs – environmentalism as hygiene factor," International Entrepreneurship and Management Journal, Springer, vol. 19(1), pages 121-150, March.
    7. Claver-Cortés, Enrique & Pertusa-Ortega, Eva M. & Molina-Azorín, José F., 2012. "Characteristics of organizational structure relating to hybrid competitive strategy: Implications for performance," Journal of Business Research, Elsevier, vol. 65(7), pages 993-1002.
    8. Marco Capasso & Tania Treibich & Bart Verspagen, 2015. "The medium-term effect of R&D on firm growth," Small Business Economics, Springer, vol. 45(1), pages 39-62, June.
    9. Knight, Gary & Moen, Øystein & Madsen, Tage Koed, 2020. "Antecedents to differentiation strategy in the exporting SME," International Business Review, Elsevier, vol. 29(6).
    10. Julen Castillo‐Apraiz & Jesus Matey, 2020. "Customizing competitive strategy to entry timing: Implications for firm performance in the pharmaceutical industry," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 41(6), pages 976-985, September.
    11. Hansen, Eric & Nybakk, Erlend & Panwar, Rajat, 2015. "Pure versus hybrid competitive strategies in the forest sector: Performance implications," Forest Policy and Economics, Elsevier, vol. 54(C), pages 51-57.
    12. Najib Ullah Khan & Shuangjie Li & Muhammad Nabeel Safdar & Zia Ullah Khan, 2019. "The Role of Entrepreneurial Strategy, Network Ties, Human and Financial Capital in New Venture Performance," JRFM, MDPI, vol. 12(1), pages 1-16, March.
    13. Laura Carraresi & Xhevrie Mamaqi & Luis Miguel Albisu & Alessandro Banterle, 2016. "Can Strategic Capabilities Affect Performance? Application of RBV to Small Food Businesses," Agribusiness, John Wiley & Sons, Ltd., vol. 32(3), pages 416-436, July.
    14. Stephanie E. Mansion & Andreas Bausch, 2020. "Intangible assets and SMEs’ export behavior: a meta-analytical perspective," Small Business Economics, Springer, vol. 55(3), pages 727-760, October.
    15. Marina Agranov & Jeongbin Kim & Leeat Yariv, 2023. "Coordination with Differential Time Preferences: Experimental Evidence," Working Papers 2023-10, Princeton University. Economics Department..
    16. RPIR Prasanna & JMHM Upulwehera & BDTN Senarath & GAKNJ Abeyrathne & PSK Rajapakshe & JMSB Jayasundara & EMS Ekanayake & Sisira Kumara Naradda Gamage, 2021. "Factors Determining the Competitive Strategic Positions of the SMEs in Asian Developing Nations: Case Study of SMEs in the Agricultural Sector in Sri Lanka," Economies, MDPI, vol. 9(4), pages 1-24, December.
    17. Baiqing Sun & Ramadhan Kauzen, 2023. "The Impact of Port Infrastructure and Economic Growth in Tanzania: Adopting a Structural Equation Modeling Approach," SAGE Open, , vol. 13(1), pages 21582440221, January.
    18. Yu, Ming-Miin & Rakshit, Ipsita, 2023. "Target setting for airlines incorporating CO2 emissions: The DEA bargaining approach," Journal of Air Transport Management, Elsevier, vol. 108(C).
    19. Fichert, Frank & Kirschnerová, Ivana & Tomová, Anna, 2020. "Business models in business aviation – An empirical analysis with a focus on Air Charter Companies," Research in Transportation Economics, Elsevier, vol. 79(C).
    20. Omsa, Sirajuddin & Abdullah, Ibrahim H. & Jamali, Hisnol, 2017. "Five Competitive Forces Model and the Implementation of Porter’s Generic Strategies to Gain Firm Performances," INA-Rxiv 9hbwt, Center for Open Science.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bjc:journl:v:10:y:2023:i:8:p:38-52. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Dr. Renu Malsaria (email available below). General contact details of provider: https://rsisinternational.org/journals/ijrsi/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.