Differentiation Strategy and Performance of Long-distance Bus Companies in Kenya

Abstract

Safe transport is an essential element to the development of an economy of any country. Transport enables movement of people, services and goods, from one location to another one. In Kenya, majority of the population who travel beyond three hundred (300) kilometres commonly use long distance bus service. Travelling for a long distance in a poorly maintained bus can be quite uncomfortable. Some buses are normally over-packed with hard seats, poor ventilation, overly slow or overly speedy and poor sanitation. Consequently, long distances need the most comfortable travelling medium to at least not get over exhausted. In product differentiation strategy, a firm seeks to be unique in its product offing compared to its competitors. This study sought to contribute to knowledge by assessing the influence of differentiation strategy on performance of long-distance bus companies in Kenya. Porter’s generic strategies are the main model anchoring the study. Cross-Sectional survey was used as research design. The population of the study consists of fifty one (51) registered and licensed long distance bus companies in Kenya. Primary and secondary data were collected by the use of a structured questionnaires and review of regulatory bodies’ websites and availed documents. Correlation and regression analyses were used to test hypotheses. Not all organizational performance determinants were included but balanced score card was appropriately used to reflect non-financial and financial indicators. Results show that safety strategy has the most significant influence on performance of long-distance bus companies in Kenya. This was followed by comfort and reliability respectively. The significance of safety measures when it comes to transporting people is quite critical. The central recommendation that the study offers as impetus to strategic management body of knowledge, transport companies and policy makers is the need to consider safety measures as the most essential differentiating features in transport management in order to win the confidence and loyalty of passengers thus enhance performance. The major limitation of this study is that primary data was gathered from three (3) bus company managers only per company. However, additional secondary data was used to validate primary data hence reduce common bias.