Effect of Generic Strategies on the Performance of Petrol Stations in Nairobi County, Kenya

Abstract

With the liberalisation of the petroleum industry and regulation of the sale of petroleum products by the Energy Regulatory Commission, there has been stiff competition among industry players thus impacting on the performance of petrol stations. Organisations employ various strategies to survive in the industry. The purpose of this study was to determine the effect of generic strategies on the performance of petrol stations in Nairobi County, Kenya and the objectives were: To assess generic strategies adopted by petrol stations in Nairobi County, to evaluate the performance measures adopted by petrol stations in Nairobi County and to determine the effect of generic strategies on the performance of petrol stations in Nairobi County. This study adopted a descriptive research design. The sample size was 63 petrol stations in Nairobi County and the respondents were the petrol station managers or supervisors. Questionnaires were the primary data collection instrument. The data was analysed using descriptive and inferential statistics. The results showed that cost leadership and focus were the dominant generic strategies adopted by petrol stations in Nairobi County at 79% and 32.8% respectively. Sales volume and profitability were the most common measures of performance used by petrol stations in Nairobi County with respondents agreeing 98.3% and 96.7% respectively with their use. Based on the findings, the research concluded that there was a positive and significant relationship between generic strategies and performance of petrol stations in Nairobi County. The research recommended that petrol stations should increase the presence of other businesses within the petrol stations’ premises to increase their sales volume so as to improve their performance.