Effects of Growth Strategies on Organizational Performance in Five Star Hotels in Nairobi

Abstract

The general objective of this study was to establish the effects of growth strategies on organizational performance of five star hotels in Nairobi. The following research questions guided the study; what is the impact of product development on organizational performance of Five Star Hotels in Nairobi? What is the impact of diversification on organizational performance of Five Star Hotels in Nairobi? And what is the impact of market penetration on organizational performance of Five Star Hotels in Nairobi? The study used a descriptive research design to integrate various components of the study, a population of 125 managers working in five star hotels in Nairobi were targeted with a sample size of 95 managers. Stratified sampling technique was deployed for this particular study. A structured questionnaire was used to collect data. Data analysis was conducted using Statistical Package for Social Sciences version 24 to obtain both descriptive and inferential statistics. These included frequency tables, charts, mean and standard deviation. Inferential statistics included correlational, ANOVA and regression analysis. In determining the impact of product development on organizational performance in five star hotels, the findings indicate that there exists a significant relationship between product development and organizational performance, r (0.886); p-value < 0.01. The study further established that product development accounts for 78.6% in variability in organizational performance. This study sought to determine the impact of diversification on organizational performance of five star hotels. The findings of the study revealed that there exists a significant relationship between diversification and organizational performance, r (0.799); p-value < 0.01. The study established that diversification strategy accounts for 71.9% variability in organizational performance. This study sought to determine the impact of market penetration on organizational performance of five star hotels. The findings of the study revealed that there exists a significant relationship between market penetration and organizational performance, r (0.799); p-value < 0.01. The study established that market penetration accounts for 63.3% in organizational performance.This study concludes that there is a significant and positive relationship between product development and organizational performance. This study concludes that product development is essential for the organization that seek to have a strong aspect or presence and domination in the market. This study also concludes that product development enhance innovation. This study concludes that diversification strategy is crucial for risk diversification in the organization. Diversification strategy gives the organization an opportunity to leverage its investments especially when it comes to pursuing growth in a selected market segment. This study concludes that there is a significant and positive relationship between market penetration and organizational performance. Market penetration is regarded as the mode in which a particular product gains a market share in a particular market. This study recommends that five star hotels should emphasize use product development strategy in creating new products and services that will attract consumers throughout the seasons of the year. Product development strategy will help five star hotels in creating a sustainable competitive advantage as they compete in the hotel industry which is dynamic in nature. This study recommends that five star hotels should use diversification strategies to expand their market share by investing in related industries such as tourism services to attain a good market share in the industry. Five star hotels can diversify by investing in event planning as well as tourism activities that will contribute in revenue generation for the hotels. This study recommends that five start hotels should use market penetration strategies to attract customers in engaging with the services and products offered by the hotels in the hospitality industry. Five star hotels should invest in marketing campaigns and advertisement in order to create awareness of their products and services in the hotel industry.