Differentiation Strategy and Performance of Deposit Taking Savings and Credit Cooperative Organizations in Kirinyaga County, Kenya

Abstract

Performance is an essential indicator of the success or failure of any organization. In order to remain competitive and increase performance, businesses are increasingly adopting competitive strategies. This study sought to establish the influence of differentiation strategy on performance of deposit taking SACCOs in Kirinyaga County, Kenya. The study used a descriptive cross sectional research design and adopted a census survey where all six licensed deposit taking SACCOs operating in Kirinyaga County were considered. The study population was managers of the SACCOs giving 43 respondents. The researcher administered 43 questionnaires out of which, 37 were completely filled and returned representing a response rate of percent. The researcher applied descriptive statistics by use of frequencies, percentages, means and standard deviation in form of tables, graphs while Pearson correlation coefficient and multiple linear regression analysis was adopted for inferential statistics. A correlation analysis results revealed a correlation value (r) of 0.598 with a significance level of p < 0.000 which indicates a strong positive relationship between differentiation strategy and SACCO performance. The coefficient of determination adjusted R squared for the regression model yielded a value of 0.339 with a standard error of estimate of 0.27388. This implies that 33.9 percent of the variation in the SACCO performance was explained by differentiation strategy. The remaining 66.1 percent of the variations in SACCO performance are accounted for by other variables not discussed in this study. The study concludes that differentiation strategy among the SACCOs had a significant effect on performance.The study recommends that it is important for deposit-taking SACCOs in Kirinyaga County, Kenya to embrace and adopt differentiation strategy to increase their performance as there is a strong and statistically significant link between differentiation strategy and performance of deposit taking SACCOs in Kirinyaga County, Kenya.