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Strategic alliances on performance of retail firms in Nairobi County, Kenya

Rosemary Muange (Department of Management Sciences, Moi University, Eldoret, Kenya)
Loice C. Maru (Department of Management Sciences, Moi University, Eldoret, Kenya)

The TQM Journal

ISSN: 1754-2731

Article publication date: 12 October 2015

1001

Abstract

Purpose

The purpose of this paper is to determine the effect of strategic alliances on firm performance and the moderating effect of firm size in retail firms in Nairobi County in Kenya.

Design/methodology/approach

Resource Dependency Theory was used to guide the study. The study adopted explanatory research design. Questionnaires were used to collect data from sample of 216 respondents through stratified and simple random sampling technique. The study used inferential statistics to test hypotheses.

Findings

Study findings indicated that joint marketing alliances, procurement-supplier alliances, joint manufacturing alliances and technology development alliances have significant and positive effect on firm performance. Based on the findings, creating a joint marketing, procurement-supplier, joint manufacturing and technology development alliances mostly enhance firm performance.

Research limitations/implications

The study considered only one county out of 47, although this county hosts the capital city, where most of the firms considered are located. It therefore is representative of all counties and firms considered in this study. It also considered top management staff and thus may have an effect since the lower cadre staff were not considered. However, most of the required information was expected from top management since these are the ones who make decisions, and hence most affected by strategic alliances.

Practical implications

This study has practical implication on firm performance because it has established that strategic alliance improves on overall firm performance. This manifests itself in terms of improve productivity, production efficiency and profitability. It also helps in the availability of products to the end users.

Social implications

Through improved productivity, efficiency and profitability, this translates to improved terms of payment of staff and hence improved quality of lives of their families and communities within which they live. It also enables the firms to participate more in corporate social responsibility projects which in turn improves the standard of living of the communities around them.

Originality/value

The study has provided an empirical insight on the importance of strategic alliance on firm performance. This is the first study done in the Kenyan context concerning strategic alliances formed by firms to improve on their performance especially on retail firms.

Keywords

Citation

Muange, R. and Maru, L.C. (2015), "Strategic alliances on performance of retail firms in Nairobi County, Kenya", The TQM Journal, Vol. 27 No. 6, pp. 732-740. https://doi.org/10.1108/TQM-06-2015-0075

Publisher

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Emerald Group Publishing Limited

Copyright © 2015, Emerald Group Publishing Limited

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