Abstract:
The development of Savings and Credit Cooperatives (SACCOs) in Kenya has
witnessed significant productivity, with the World Council of Credit Unions
acknowledging Kenya's SACCO sector as the most robust in Africa and the seventh
fastest-growing globally. This surge in participation has intensified competition within
the sector, prompting the need for comprehensive exploration. While prior studies have
delved into the impact of competitive strategies on SACCOs' financial performance,
research dedicated specifically to SACCOs in Kenya remains relatively limited. In
response, this study undertook a detailed investigation into the effect of competitive
strategies on the financial performance of SACCOs in the vibrant setting of Narok
Town. It evaluated the effects of low-cost strategies, examined differentiation, and
explored the impact of focus strategies. The study was guided by, Michael Porter's
competitive strategies theory, Bowman's strategy clock, the Resource-based theory, and
the Contingency theory. The study used descriptive research design and targeted ten
registered SACCOs in Narok Town, Kenya. The study respondents comprised of board
of directors and the SACCO’s branch managers. Census was used to select the study
sample size which composed of 100 respondents. Data analysis involved descriptive
and inferential statistical analysis, including regression and correlation analyses. The
findings revealed that the adoption of low-cost strategies (β = 0.321, p < 0.05),
differentiation strategies (β = 0.209, p < 0.05) and focus strategies (β= 0.117, p< 0.05)
had a significant positive effect on financial performance of SACCOs in Narok Town.
Consequently, the study concludes that implementing and integrating competitive
strategies is vital to effectively enhance the financial performance of SACCOs,
particularly within the competitive market environment prevalent in Narok Town. The
study therefore recommends that SACCOs operating within Narok Town proactively
consider adopting a holistic approach, strategically combining low-cost strategies,
differentiation tactics, and focused strategies to effectively maintain a competitive edge
and achieve sustainable financial performance amidst the dynamic and competitive
market landscape.
