Competitive Strategies And The Performance Of Matatus In The Public Service Transport Sector In Nairobi City County Kenya

ABSTRACT

The transport sector in Kenya is characterized by non-conformance to regulations, poor infrastructure, high costs, poor safety and inefficiency aggressive competition for passengers on the road, unsafe operations, a low level of service, unfair labour practices, and inadequate management and crew experience and training all of which affect the performance of PSV’s in Kenya. The objectives of this study were to establish the effect of competitive strategies on the performance of the public service vehicles sector within the transport industry in Kenya. This study was guided by three theories of strategic management these are the resource based theory, competitive advantage theory and agency theory. This study adopted a descriptive research design. This study focused on matatus in Saccos that ply three routes in Nairobi namely Mombasa Road, Jogoo Road and Industrial Area. The target population of this study was 236 vehicles that ply the three routes in Nairobi City County. The study targeted 130 matatus in Rembo Shuttle Sacco, 56 matatus in County Link Sacco and 50 matatus in Umoinner Sacco. Specifically it considered drivers conductors and the owner or manager. From the above population a sample of 30% was taken using Census and stratified random sampling. In this study, researcher administered questionnaires were distributed to respondents. Content validity was used and pilot study was used n to ascertain if the questionnaire was reliable involving the sampled respondents. Methods of descriptive statistics which were employed in the study include mean and standard deviation. Charts and graphs were presented using statistical package for social sciences (SPSS) version 20.0. The relationship between the independent and dependent variable was shown using both regression and correlation analysis. Analysis of variance was also used to test the level of significance on the relationship between each of the independent variables and the dependent variable at 95% confidence level. The results from the multiple regression analysis indicated that all the variables had a positive correlation with the PSV performance. The p values also indicate that all the variables, are significant at 0.05 level of significance. Cost leadership has a p-value of 0.000, differentiation strategy has a p-value of 0.000, and focus strategy has a p-vale of 0.017 while unique competencies have a p-value of 0.002. R2 of .77 was obtained thus the variables explained 77% of the variation in PSV performance. The study recommends that in applying cost leadership strategy, PSVs in Nairobi city county, need to focus on efficiency since many clients prefer using the buses that are fast and under very favorable prices. Secondly, while applying the unique competencies strategy, PSVs in Nairobi City County need to take competence as the foremost when it comes to hiring experienced personnel. Thirdly, If PSV uses the focus strategy; it must tailor its services to satisfy the segment being targeted. Finally while using differentiation strategy, PSVs can take advantage of the current situation and offer differentiated services to clients who are willing to pay more for comfort, peaceful rides with soothing mellow music, polite attendants and drivers who observe traffic rules.