Corporate Growth Strategies and Performance of Selected Real Estate Firms in Nairobi City County, Kenya
DOI:
https://doi.org/10.70619/vol4iss4pp10-19Keywords:
Corporate growth strategies, real estate firm, strategic alliances, firm performanceAbstract
Purpose: Real estate and properties are emerging everywhere these days. In Nairobi, one will not walk more than ten kilometres before stumbling upon a construction site or a developed residential estate and commercial property. Although this trend is ongoing, the economy has yet to recover from the COVID-19 pandemic, and the Russian-Ukrainian war only worsens the situation. Inflation rates continue to rise, and the Kenyan currency continues to depreciate, reducing aspiring real estate owners' demand for real estate and subsequently leading to a decline in the performance of real estate firms. To improve their performance, real estate firms formulate and implement growth strategies. This study aims to determine the effect of strategic alliances on the performance of the selected real estate firms in Nairobi City County, Kenya.
Methods: The study is explained by three theories: Resource-based view theory, contingency theory, and Porter’s five forces theory. The research has adopted a descriptive research design but limited to selected real estate firms in Nairobi City County targeting finance leads, sales leads, marketing leads, and operations lead. Data was collected using semi-structured questionnaires administered to managerial staff in the sampled real estate firms. Drop and pick method was adopted to get the research tools to the respondents. Prior to the main data collection phase, the researcher piloted the study on Cytonn real estate firm on eight of its managerial staff in the different departments to establish the validity and reliability. The researcher conducted the analysis with the utilization of Statistical Package for Social Sciences after coding and cleaning the data collected. Multiple regression was utilized to determine the impact of growth strategies on the performance of real estate firms. ANOVA substantiated the relevance of the regression model that the researcher chose and determined the existence of a significant variation caused by the independent variables. Pearson’s correlation matrix was used to determine the relationship between the variables.
Results: Descriptive statistics revealed that leveraging cutting-edge technology had the highest mean score (3.96), indicating its crucial role in enhancing operational efficiency. Strategic alliances geared towards specific goals scored the highest mean (3.42), underscoring the importance of goal-oriented partnerships. Geographic diversification emerged as a key strategy with a mean score of 3.62, highlighting its significance in spreading risk and accessing new markets. There was a positive and significant relationship between the independent variable and the performance of real-estate firms as shown by the significant levels of 0.032 for strategic alliances.
Conclusion: The researcher investigated the effect of corporate growth strategies on the performance of real-estate firms in Nairobi City County, Kenya. The analysis indicated significant positive correlations between innovation management strategies, strategic alliances, diversification strategies, and firm performance. Strategic alliances have the strongest correlation with firm performance of 0.698, followed by innovation management strategies and diversification strategies. The significant relationships suggest that improving these strategies can positively impact performance of real-estate firms in Nairobi city county, Kenya, with strategic alliances being particularly influential.
References
Allen, R., & Helms, M., (2006). Linking Strategic Practices and Organizational Performance to Porter's Generic Strategies. Business Process Management, 12(4), 433-454.
Bukirwa, S. (2017). Influence of competitive strategies on organizational performance: A survey of hotels in Mombasa County, Kenya. Strategic Journal of Business & Change Management, 4(2).
Dannels, S. A. (2018). Research design. In The Reviewer’s Guide to Quantitative Methods in the Social Sciences (pp. 402-416). Routledge.
Gachanja, R. (2013). Merger and Acquisition strategies and performance of Commercial Banks in Kenya. Unpublished masters project.
Kasongo, P., & Misango, S. (2019). Effects of generic competitive strategies on organizational performance in the manufacturing industry: a case of Bamburi cement limited, head office, Nairobi. International Journal of Economics, Business and Management Research, 3(2).
Kinyuira, D. (2014). Effects of Porter’s Generic competitive strategies on the performance of Savings and Credit Cooperatives (SACCOs) in Murang’a County, Kenya. Journal of Business and Management, 16(6), 93-105.
Kireru, J., Ombui, K., & Omwenga, J. (2016). Influence of Product Differentiation Strategy in Achieving Competitive Advantage in Commercial Banks: A Case of Equity Bank Limited. International Journal of Business & Law Research 4 (2), 40-52.
Kitua.J. K (2014). The state of strategic management practice is not– for–profit organization. The case of public membership clubs in Machakos unpublished MBA dissertation University of Machakos.
Kothari, C. R. (2004). Research methodology: Methods and techniques (second edition). New Delhi: New Age International(P)Limited.
Kubai, E., Karanja, P., & Kihara, A. (2021). Influence of differentiation strategy on performance of the insurance companies in Kenya. Journal of Business and Strategic Management, 6(4), 21-31.
Kutllovci, E., Shala, V., & Troni, B. (2012). Business Strategy, the key determinants of SME growth in Kosovo. International Journal of Advances in Management and Economics, 1(3), 42-46.
Maithya, S. J. (2021). Effects of Growth Strategies on Performance of Telecommunication Firms in Kenya. Unpublished Masters project.
Muchele, N. (2019). Effects of Growth Strategies on the Performance of Food Manufacturing Firms in Nairobi County, Kenya (Doctoral dissertation, Egerton University).
Mugenda, O. M., & Mugenda, A. G. (2003). Research methods: quantitative and approaches (4th ed.). Acts Press. Nairobi.
Mung’uri, J. (2021). Competitive advantage and Performance of Real estate development firms in Nairobi City. Unpublished Masters project.
Maingi, P. (2020). Effect of Innovation strategies on Performance of Real Estates firms in Mavoko sub-county, Kenya. Unpublished Masters project.
Mwangi, D. (2019). Effects of Growth Strategies on Organizational Performance in Five Star Hotels. Unpublished master's project.
Mweshi, G. K., & Sakyi, K. (2020). Application Of Sampling Methods For The Research Design. Archives of Business Review–Vol, 8(11).
Mwilu, H., & Njuguna, R. (2020). Corporate growth strategies and performance of selected savings and credit cooperative societies in Nairobi City County, Kenya. International Journal of Business Management, Entrepreneurship and Innovation, 19-30.
Obonyo, M. A. (2015). Growth strategies and performance of Safaricom Limited in Kenya (Doctoral dissertation, University of Nairobi).
Ogunbiyi, J. O., & Oladokun, T. T. (2023). Key performance indicators in real estate professional business in Lagos, Nigeria. Journal of General Management, 49(1), 65-77.
Rothaermel, F. T. (2017). Strategic management / Frank T. Rothaermel, Georgia Institute of Technology. New York: McGraw-Hill Education.
Sifuna, I. N. (2014). Effect of competitive strategies on performance of public universities in Kenya. Unpublished MBA Thesis, 57.
Singh, S., & Singh, S. (2018). Sampling techniques.
Sukati, I., Hamid, A. B. A., Baharun, R., Alifiah, M. N., & Anuar, M. A. (2012). Competitive Advantage through Supply Chain Responsiveness and Supply Chain Integration. International Journal of Business and Commerce, 1(7), 1–11.
Wanjiru, A. I., Muathe, S. M., & Kinyua, J. (2019). Corporate Growth Strategies, External Operating Environment, and Firm Performance: An Empirical Survey of Large Manufacturing Firms in Nairobi City County, Kenya. Journal of Management and Strategy, 21-36.
Wheelen, T. L., Hunger, J. D., Hoffman, A. N., & Bamford, C. E. (2017). Strategic management and business policy (Vol. 55). Boston: Pearson.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2024 Osogo Stephanie Atieno, Samuel Maina, Ouma Emmanuel Otieno
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
