Application of Porter’s Generic Competitive Business Strategies and their Effect on Firm Performance in Zanzibar Hotel Industry.

Justinian, Josephat Mutabuzi (2015) Application of Porter’s Generic Competitive Business Strategies and their Effect on Firm Performance in Zanzibar Hotel Industry. Masters thesis, The Open University Of Tanzania.

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Abstract

The increase of hotels in Zanzibar has caused high competition in the industry. For this reason the main objective of this study was to analyze the effect of application of Porter’s generic competitive business strategies on firm performance in Zanzibar hotel industry with specific reference to 3 to 5 star hotels in Unguja. The sampling approach adopted in this study was convenience or accidental method and the sample size focused on General Managers of nine (9) hotels and customers in these hotels. The data was collected by the use of questionnaires which was then computed and analyzed by using Pearson Chi-square tests and linear regression model in SPSS to investigate the relationship between Porter’s generic competitive business strategies and firm performance. The study established the effect of cost leadership on firm performance, determined how differentiation strategy affect firm performance and evaluated the effects of focus strategies. The study also confirmed that there is no significant relationship between the Porter strategies and firm performance taking customer satisfaction as an indicator. The findings did not strongly attribute the firm performance to the strategies adopted thus suggesting that pursuit of single generic business strategy as suggested by Porter, did not place a firm in a better strategic position and did not result in superior performance.

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