Open AccessCost Leadership Strategy: A New Game Strategy for Competitive Advantage in Milk Processing Firms in Kenya
Author(s) -
Paul G. Kimiti,
Stephen M. A. Muathe,
Elishiba Muthoni Murigi
Publication year - 2021
Publication title -
european scientific journal
Language(s) - English
Resource type - Journals
eISSN - 1857-7881
pISSN - 1857-7431
DOI - 10.19044/esj.2021.v17n23p296
Subject(s) - competitive advantage , competitor analysis , cost leadership , operationalization , business , scope (computer science) , industrial organization , marketing , strategy implementation , strategic management , computer science , philosophy , epistemology , programming language
Competitive advantage refers to the benefits that firms accrue from unique combination of possessions to outperform competitors. To build competitive advantage as a gateway to superior performance, firms pursue various beneficial strategic orientations. This study sought to establish whether cost leadership strategy gave rise to competitive advantage in milk processing firms in Kenya. The authors utilized the indicators of economies of scale, economies of scope and operational efficiency to operationalize cost leadership strategy while competitive advantage was operationalized through capabilities and knowledge. A census of all the milk processing firms was conducted with 148 respondents participating in the study. Data was collected using semi-structured self-administered questionnaires and subsequently analyzed using descriptive and inferential statistics. The study concluded that cost leadership strategy was a source of competitive advantage for the milk processors. It therefore recommends pursuit of cost leadership strategy as a competitive tool. It further recommends building of relevant capabilities and protection of tacit knowledge by firms as foundational blocks for competitive advantage.