Open AccessINFLUENCE OF COST LEADERSHIP STRATEGY ON PERFORMANCE OF THE INSURANCE COMPANIES IN KENYA
Author(s) -
Edwin Kubai,
Patrick Ngugi Karanja,
Allan Kihara
Publication year - 2021
Publication title -
journal of business and strategic management
Language(s) - English
Resource type - Journals
ISSN - 2520-0402
DOI - 10.47941/jbsm.695
Subject(s) - cost leadership , business , maturity (psychological) , sample (material) , order (exchange) , quality (philosophy) , marketing , competition (biology) , descriptive research , market share , descriptive statistics , actuarial science , competitive advantage , finance , psychology , ecology , developmental psychology , philosophy , chemistry , statistics , mathematics , chromatography , epistemology , biology
Purpose: The study sought to determine the influence of cost leadership strategy on performance of the insurance companies in Kenya. Specifically, the study aimed at establishing the influence of price of premiums, maturity period, market segment and nature of products.
Methodology: The study adopted the descriptive research design method to ascertain and describe the characteristics of the variables. A sample size of 55 insurance companies was reached, and a semi-structured questionnaire was used to collect primary data from the respondents. Data was analyzed using the SPSS software, from which appropriate findings were presented.
Findings: The study findings showed that the cost leadership strategy was largely applied in the insurance companies in Kenya, and most of them have realized great performance. Nonetheless, the study found that most insurance companies’ distribution channels for products are moderately entrenched and hence firms may not have been perfectly efficient in reducing associated costs.
Unique Contribution to Theory, Practice and Policy: The study recommends that insurance firms should devote more resources to execution of cost leadership programs, adoption of effective premium pricing, and enhanced use of proprietary technology in enhancing the products’ quality. The study as well recommends that insurance forms should come up with effective strategies that will help them to gain a large market segment in Kenya in order to enhance their performance, as this will effectively help them in overcoming competition in their industry.