Effect of Differentiation Focus Strategy on Performance by Selected Car Rental Business: A Case of Nairobi City County, Kenya

Abstract

Differentiation focus strategy is founded on choosing a market niche where purchasers have idiosyncratic favorites. Parameters of performance indicators include revenue growth, customer satisfaction, market share growth, profitability and productivity. The objective of this study was to determine the effects of differentiation focus strategy on performance of selected car rental businesses a case of Nairobi City County, Kenya. This study was a cross-sectional descriptive study design where purposive sampling technique was used to select fifteen (15) car rental business in Nairobi City County. Stratified and simple random sampling technique was employed in recruiting three categories of respondents. Structured questionnaires were used to collect primary data which will be analyzed by Statistical Package for Social Science (SPSS) version 22. Descriptive statistics such as frequency, regression and correlation analysis was used to give the results of the study. The findings of the study revealed that differentiation focus strategy were statistically insignificant at P value greater than 0.05 by Chi-square and analysis of variance. There by accepting the null hypothesis that differentiation focus strategy had no effect on performance of car hire business in Nairobi City County. Correlation analysis revealed that there was no correlation between differentiation focus strategy and indicator of performance improvement at r value 0.046 and a negative correlation between differentiation focus strategy and extent of performance at r value -0.010. Multiple logistic regression analysis showed that differentiation focus strategy had a significant (P value 0.00*) association between very large extent, great extent, moderate extent of performance, indicator of performance improvement. In conclusion, differentiation focus strategy was considered statistically insignificant on performance as a result the null hypothesis was accepted and the alternative hypothesis rejected. This study recommendations that the future research be carried out using moderating effect of the car hire business on influence of differentiation focus strategy on performance.