MCOM Theses and Dissertations (2014)

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An analysis of the relationship between competitive strategies and organizational performance : a case of mobile telecommunication companies in Kenya
(Strathmore University, 2014) Gathinji, Loice Nyawira
The main aim of the study was to examine the relationship between competitive strategies and organizational performance among firms in the mobile telecommunications industry in Kenya. The study identified the competitive strategies adopted by firms in the mobile telecommunication industry in Kenya, assessed the different levels of implementation of competitive strategies within the firms and lastly examined the relationship between competitive strategies and their performance, This study employed a descriptive survey design and collected data from 63 respondents out of the sample size of72 respondents selected purposively. The study revealed that in the telecommunication industry competition is high and product differentiation and low cost leadership are the most commonly used strategies. Other strategies include strategic alliance strategies and specific market focus strategies. The study concluded that the strategies adopted improved the overall organization performance and some of the key performance indicators that were influenced are: Sales and market share, customer retention, profitability and product developmentlinnovation. The study recommends that organizations should adopt strategies that allow them to achieve competitive advantage over others. Organizations that chose to adopt cost leadership strategy should focus on gaining competitive advantage by having the lowest cost in the industry. In order to achieve a low-cost advantage, an organization must have a low-cost leadership strategy, low-cost manufacturing, and a workforce committed to the low-cost strategy. Also the study recommends that when using product differentiation strategy, a company should focus its efforts on providing a unique product or service to enhance customer loyalty.
Customer loyalty in fast food foreign franchises in Nairobi : antecedents and behavioral consequences
(Strathmore University, 2014) Nguti, Lucy Esther Kuthea
The aim of the study was to determine the levels of loyalty of the customers of the fast food foreign franchises, the factors that influence customer loyalty in fast food foreign franchises and the behavioural impact of customer loyalty in the fast food foreign franchises in Nairobi. Using purposive sampling, data was collected from the 25th of March 2014 to the 1st of April 2014 from one hundred and fifty customers who had visited fast food franchises in Nairobi more than once. The data was analysed using descriptive statistics, linear regression analysis and correlation analysis. It was established that factors that influence customer satisfaction and trust, and by extension customer loyalty, in fast food foreign franchises in Nairobi are service quality, price, good environment, food quality and convenient location. Service quality, price fairness and good environment were critical in ensuring customer satisfaction and trust which lead to customer loyalty. The study also established that the consequences of customer loyalty were willingness to pay more, interpersonal communication and repurchase behaviour. However, despite having a positive relationship with loyalty, the consequence of being willing to pay more only has a weak relationship with loyalty. This means that the customers may be loyal but they will still be price sensitive, thus when setting prices franchise holders will need to take that into consideration. The findings also indicated that only 40 percent of the consumers of fast food foreign franchises in Nairobi are truly loyal to their franchises of choice and were not likely to switch to other brands or establishments. However, 53 percent of the respondents exhibited spurious loyalty, which is a volatile type of loyalty. The franchise holders therefore need to handle their customers carefully since large proportions are liable to switch if dissatisfied. Further research could focus on a comparative study in loyalty levels between local and foreign fast food franchises in Kenya since about sixty percent of the respondents indicated that they were not loyal to the foreign fast food franchises. Further research could also be conducted in other towns with foreign fast food franchises such as Mombasa.
The determinants of volatility of the lending interest rate in Kenya
(Strathmore University, 2014) Githiaka, Teresa Nyokabi
This study sought to measure the volatility and identify the determinants of volatility of the lending interest rate in Kenya. Both secondary and primary data was used. Primary data was obtained from a sample of 44 financial institutions in Kenya. Secondary data was obtained from the Central bank and Kenya National Bureau of Statistics for the periods 1991 to 2012. This study was guided by the Loanable funds theory. In data analysis, the regression, descriptive statistics, F-test and GARCH models were used. The key findings from the study were: (1) The Garch reaction parameter (a) was 0.61426092 while the Garch persistence parameter β was 0.87405664. A high a that is associated with a low β produces a very high Garch volatility. This means that the lending interest rate was characterized by high volatility. Following the introduction of the CBR in 2005, volatility reduced from 84% to 22% (2) the main determinants of volatility the lending interest rate are the expected changes in inflation rate, central bank rate, growth domestic policy, treasury bills and exchange rate. The p values were less than 5% and hence significant; (3) the factors that management of financial institutions take into consideration when they are fixing the lending interest rate include, Central Bank rate of Kenya, expected changes in inflation rate, Credit worthiness of the borrower, expected changes in a country's exchange rate, economic growth measured by the GDP ,the deposit rate, amount of loan, characteristics of the credit market, nature of the collateral, liquidity and solvency of the bank, level of competition, purchase of government bonds by the banks, bank's expected profits, term of the loan, demand for capital, interbank rate and current year country's budget deficit. The research study confirmed the monetary policy, loanable funds and Fisher's theory of interest rate determination. Inflation, CBR and money supply were found to be major determinants of the lending interest rate. Further research was suggested on; why the lending rate has been on an increasing trend yet volatility has reduced since the CBR introduction? How can the bank's balance sheet and regulatory requirements be made optimal so that they don't have to affect the fluctuations of the lending interest rate with great magnitude?
Market differential reaction to profit warning announcements and dividend decrease : an empirical analysis of the Nairobi Securities Exchange
(Strathmore University, 2014) Mitau, Carol Betty Ndanu
The main aim of the study was to investigate the market differential reaction to profit warning announcements and dividend decreases by carrying out an empirical analysis of the Nairobi Securities Exchange. To achieve this objective, an event study was employed over a window of 11 days consisting of 5 days before and 5 days after the announcement of both events. The sample consisted of 11 companies that had issued profit warning announcements and had dividend decreases over the period 2002 to 2012. There were 25 observations of companies that issued profit warnings and 55 observations of companies that had a decline in their final dividend between the periods 2002 to 2012. Abnormal returns were calculated using the market adjusted model and tests of significance conducted on them. The study found that the average abnormal returns on the day before the profit warning announcement and the day of the announcement were statistically significant at the 5% level while those on the first day after announcement were significant at the 10% level. On the other hand, the average abnormal returns the day before the dividend decrease, the third day and were statistically significant at the 5% level while the rest were significant at the 10% level. The results showed that at the Nairobi Securities Exchange, profit warning announcements and dividend decreases are generally associated with negative average abnormal returns. The Mann- Whitney Rank Sum test was run so as to determine whether there is a statistical significant difference between the average abnormal returns elicited by the two events. The test concluded that there is no statistical significant difference in median average abnormal returns between profit warnings and dividend decreases.
Market share measurement for universal mobile telecommunication system operators in Kenya
(Strathmore University, 2014) Ominde, Diana Kageha
The purpose of this study was determine the market share of key mobile operators of Universal Mobile Telecommunication Systems. Data was collected on identified factors under the voice segment by reviewing documents of the CCK quarterly report published by the CCK. This data was a representation of all the operators present from the year 2009 to 2013. The descriptive statistic ofthe data was carried out by analysis ofstandard deviations, percentages and means. The output of this descriptive statistic showed that the factors indeed have impact on the market share. The data was then fitted in the model and output generated on quarterly basis clearly outlining the percentage effect ofeach factor on individual's operators' market share. This thesis assesses the usefulness of the identified factors for UMTS market share measurement. the inclusive of the factors is defined as a discrete event using logit model. The results obtained from logit model confirm the ability ofTLMT (especially the Minutes ofUse indicator) to estimate the current market share per operator and to anticipate change in one quarter ahead. Results from the out-of-sample GDP growth value are ambiguous. Nevertheless the Call Termination Rates significantly improved original measure based on a model with standard macroeconomic variables and therefore we conclude in favour of its measurement power. The key findings of this study outline the rate at which the market is dynamic using logit model. This model incorporates all factors in the dynamic market and analyzes their effect on the UMTS operators. The result shows the dynamism which is consistent with logit model. Effective factors in this market share dynamism are: Number of subscription, Minutes of Use, Total Local Mobile Traffic, Call Termination Rate and GDP. The result also shows that the logistic model has a better explanatory and predictable power. Therefore, implication of this research is that the quarterly report produced by CCK with regards to the market share controlled by each operator can be revised and factors mentioned in this study can as well be considered during the percentage estimations. The conclusion is, for effective policy making and fair competition amongst the operators in this market, the regulatory board can consider the call termination charges across the networks within the market as a factor influencing and affecting the operators' market share.
Perceived factors influencing success of marketing activities of universities in Kenya
(Strathmore University, 2014-06) Sewe, Sheila Anyango
Business schools have been established in an effort to improve business management practices locally and internationally. There has been an increase in marketing activities by universities with the aim of informing the public about their offerings and in an attempt to enhance their competitive advantage. The purpose of this study was to find out which marketing activities that business schools in Nairobi undertake, in addition to how they go about measuring the success of their marketing activities and to determine which factors influence the success of their marketing activities. Activities were drawn from previous research including the 7P business school marketing mix. The study adopted a descriptive and explanatory research design. Correlation analysis was also used to explain the relationships between the various activities, the measures of success and the factors influencing success. Data was collected in the month of April 2014 on all the business schools in Nairobi. The results of the study showed that out of the 7P business school marketing mix, the one that had the highest mean is People, which are those marketing activities that have interaction among alumni, faculty and potential students. The measure of success that is mostly used is the quality of service. The factor that has the highest influence on success of marketing activities was management support. Business schools should ensure that the management supports their marketing activities by being involved in the formulation and providing the necessary resources to increase chances of their marketing activities being successful.
Relationship between environmental management strategies and profitability among Kenyan manufacturing firms
(Strathmore University, 2014) Onyango, Jean N. Anyango
Organizations formulate and implement varied forms of strategies to improve their performance. Environmental strategies are largely borne out of push by regulation unlike other strategies which are motivated by need to improve performance and profitability. Therefore the influence of environmental strategies on profitability presents a fertile ground for research. The general objective of the study was to find out the relationship between environmental strategies and profitability of manufacturing firms in Kenya. A descriptive study was conducted with a target population of 735 manufacturing firms who were members of KAM as at 2013. A sample size of 110 firms was selected from which primary data was collected using questionnaires. Data was analysed using SPSS through descriptive analysis and multiple OLS regression analysis. Results were presented using charts and tables for ease of interpretation. Study findings revealed that majority of the Kenyan manufacturing firm had adopted ISO certification to a great extent. However, environmental components such as training on EMS, redesigning of products, developing EMS policies, environmental auditing, documentation of environmental issues, implementation of EMS, investment in green technology, undertaking eco-friendly activities, production of green products, adopting renewable energy and recycling activities were adopted to a moderate extent. The study further established thatmost of the respondents indicated that adoption of environmental strategies increased firm revenues. Further, study results indicated that environmental strategies applied enhanced cost saving from safer workplace conditions, ensured cost savings from conservation of natural resources and cost reductions associated with reduced emissions. Study results further revealed that environmental management strategies had a positive relationship with profitability of firms. The study recommends that there is need for increased compliance on environmental regulations and adoption of environmental strategies so as to increase revenue for the firms, improve corporate image, increase efficiency in production by reducing wastage thus achieving ISO certification and gaining competitive advantage. The study also recommends that the government should give incentives to companies adopting the environmental management strategies and also provide more information through research and case studies, so as to guide the firms adopting these strategies. The companies also need to allocate more resources and employ services of environmental consultants to guide the firms in adopting and implementing the environmental management strategies.
The relationship between interim dividend change and future earning for listed companies in Kenya
(Strathmore University, 2014) Mbithi, Erastus Musembi
Earnings forecast have serious implication in asset allocation and portfolio selection. Dividends play significant role in forecasting and signaling future earnings and investors expect share price to react positively or negatively to any dividend announcement. The reason why investors pay attention to dividends at either interim or final stage raises the question whether managers use interim dividends for signaling purposes and managers consider future earning when making interim dividend decisions. The study tries to deepen our understanding of information content and signaling theory of dividends on future earning with specific focus to interim dividends (1999-2012). The data for the study were collected from a sample of 25 companies‟ interim financial reports and annual financial reports spanning a period of 14 years (1999-2012). The variables for study included interim dividends, earning and specific company characteristics. The data was analyzed using panel data fixed effect and pooled regression model. From the regression results, the study failed to support information content theory and signaling hypothesis of dividends with regard to future earning at 5% significance level. To corroborate the finding of regression, the study adopted triangulation to investigate managers perspectives with regard to interim dividends and data obtained through questionnaires. From the findings, results from questionnaire were consistent with regression results. It was also observed that on average companies listed in Kenya have tendency of skipping interim dividends and when they pay, they are reluctant to cut interim dividends instead they prefer paying stable (constant) interim dividends.

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