Porters’ Generic Strategies and Performance of Small and Medium Retail Outlets in Eldoret City, Kenya.

Abstract

Literature reveals that firms adopt various strategies including Porter’s generic competitive strategies to create competitive advantage and improve performance. Small and Medium sized enterprises (SMEs) operating in Kenya are experiencing increasing competition and are expected to adopt Porter’s generic strategies to enhance performance. The objective of this paper was to examine the effect of Porter’s generic strategies on the performance of small and medium retail outlets in Eldoret City, Kenya. The study was guided by Resource Based View theory and Dynamic Capabilities theory. The study adopted an explanatory and cross-sectional survey research design. The target population for this study was 160 small and medium sized retail outlets in Eldoret City, Kenya. A sample of 113 small and medium sized retail outlets was used. Primary data was obtained using self-administered questionnaires. Descriptive statistics such as frequencies, percentages, means and standard deviations were used to summarize data. Multiple regression analysis was used to test the research hypothesis. The study established that the retail outlets to a great extent adopted differentiation strategy, low-cost leadership strategy and focus strategy. The study revealed that the three strategies had a positive and significant effect on the performance of the retail firms. The findings also revealed that differentiation strategy had the greatest effect on performance followed by focus strategy while cost leadership strategy had the least but significant effect on performance. The study recommends adoption of Porter’s generic strategies to enhance performance of the retail outlets.

Keywords: Cost leadership strategy, Differentiation strategy, Focus strategy, Generic strategies, Performance

DOI: 10.7176/EJBM/18-4-06

Publication date: April 30^th 2026