Effects of strategic choices on the performance of the airline industry in Kenya
Date
2022
Authors
Miyumo, Donna
Journal Title
Journal ISSN
Volume Title
Publisher
Strathmore University
Abstract
The aviation sector is at a breaking point as a consequence of COVID-19 which has become a key catalyst to the existential crisis facing airline firms. Furthermore, the local airline industry has been lagging behind in performance has witnessed by the lack of service differentiation and growth within the majority of the domestic industry. To this end the research sought to determine the effect of strategic choices on the performance of the airline industry in Kenya. The study specifically sought to establish the effect of differentiation strategies, market penetration strategies and innovative strategies on the performance of domestic airline firms in Kenya. The review was informed by the contingency theory balance scorecard model. The research used a positivism research philosophy with quantitative techniques being employed in solving the study problem. The population of the study was the 43 domestic airline firms in Kenya. The study sampled 3-senior level employees from each firm with the sample size being determined using census sampling. The study sample participants were 129 staff members. The study collected quantitative data using structured questionnaires. The collected research data was analyzed using a mix of descriptive, factor and inferential analysis techniques. The study results were presented using charts and tables. The research was able to obtain 112 responses with majority of the respondents were female employees in the airline firms. Results showed that most respondents were marketing managers, and the least were the managing directors. The correlation analysis revealed existence of a strong and positive relation between innovative strategies, differentiation strategies and market penetration strategies and the operational performance of the airlines. The regression tests showed that strategic choices positively contribute to changes in the operational performance of the domestic airlines. The coefficients of the regression findings supported the conclusion that innovative strategies, differentiation strategies and market penetration strategies had a positive and significant effect on the operation performance of the domestic airlines. Its’s recommended that due to the pandemic the government should create a support programme that will improve the incentives to the firms, create a supportive tax structure and adopt more simplified and reliable programmes that will help improve the recovery of the domestic aviation firms. Also, the domestic airlines can further implement price differentiation practices on the domestic routes which will ensure that more customer classes are able to be served. Further, through relying on the third parties the domestic airlines can be able to serve both the leisure travelers, business travelers and corporate entities thus improving the market penetration of the firms. Lastly, the domestic airlines should invest in modern dedicated information platforms that will offer innovative customer services that will boost engagement and service quality among the firms.
Description
A Thesis submitted in partial fulfillment of the requirements for the award of the Degree of Masters of Business Administration at Strathmore University Business School
Keywords
Strategic choices, Airline industry_Kenya, Aviation sector