The Classroom Situation: Improving Study Habits of Secondary School Students in Zimbabwe

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1 Vol. 3, No. 12, 2014, The Classroom Situation: Improving Study Habits of Secondary School Students in Zimbabwe Kirui Damaris 1, Margaret Oloko 2 Abstract Changing consumer perception/lifestyle makes continual market monitoring essential. Since firms must compete in a complex and challenging environment, achieving a competitive advantage is a major concern for the management of clothing retail stores in the competitive and slow growth markets. A firm is said to have competitive advantage when it is implementing a value creating strategy not simultaneously being implemented by any current or potential competitors and when these other firms are unable to duplicate the benefits of this strategy. The aim for competitive advantage is the reason that organizations focus on strategies that are difficult for the competitors to imitate. The study will explore the dynamics of clothing retail arena and how Michael porter s three generic strategies are used by clothing retailers who operate in Thika town to gain competitive advantage. This is a comparative case study of clothing stores or retailers that are closely located and face similar competition. It will help identify how generic strategies have been adopted and recommend the one that yields the highest competitive advantage. The clothing retailers operate under the same business environment in Thika town and thus have to compete for the same customers thus creating stiff competition among them. The three generic strategies are: cost leadership, differentiation and focus strategy. Cost leadership strategy is concerned with lowering costs consequently lowering the prices of commodities. Strategies related to differentiation are designed to appeal to customers with a special and unique product. A focus strategy on the other hand can be anchored on a low cost base or a differentiation base where the strategy attempts to attend to the needs of a particular market. Descriptive research design will be used and the target population will comprise of the management and employees of the retail stores. Systematic random sampling will then be used to select the sample under study. Data will be collected through the use of questionnaires and the findings analyzed and presented using tables, pie charts, graphs and percentages. The analyzed data will help establish how competitive advantage has been achieved by the clothing retailers through Porters generic strategies. It will identify the specific differentiation, focus and cost leadership strategies that they practice and how the strategies have enabled the stores to remain relevant in the very competitive clothing industry. Keywords: Competitive advantage, Clothing retailers, strategies. 1. Introduction The strategic significance of the clothing industry in Kenya cannot be underestimated as it has been a major source of exports growth and revenue over the years. The clothing sector is labor intensive and has been an important source of job growth outside of agriculture and has helped to mitigate the unequalizing consequences of globalization (Kaplinsky, 2005). Clothing retailers in Kenya have been exposed to stiff competition in both the domestic and import markets from well established producers like China and India. There is therefore an urgent need for firms to be innovative and strategic in their operations so as to avoid the 1 Department of Business Administration, School of Business, Jomo Kenyatta University of Agriculture and Technology, Kenya 2 Department of Business Administration, School of Business, Jomo Kenyatta University of Agriculture and Technology, Kenya Research Academy of Social Sciences 880

2 adverse effects of increased competition. Competitiveness increasingly depends on the ability of firms to assimilate, master and improve the competitive edge in order to tap more market (Porter, 2001). Consumer perception is very important in gaining competitive advantage. When consumers choose between rival presentations; they go for the most advantageous for them with important features they expected. Over the years, there has been a great increase in the number of powerful frameworks used to evaluate businesses performance ranging from Porter's five forces framework to the resource-based view to transaction-cost economics (Kaplinsky, 2005). Competitive advantage means higher returns and profitability and according to Porter (2001), sustained competitive advantage is a major measure of economic value. He indicates that there are two important factors, that is; the industry structure which determines the profitability of the average competitor and sustainable competitive advantage which allows a company to outperform their average competitor. Most of the times companies will position themselves based on their strength or the advantages they posses over their competitors. Sustainable competitive advantage is therefore vital to the positioning of the organization against the competitors (Hitt, 2003). Competition is one of the major external environmental threats to any firm. It occurs when two or more firms fight for the same customers. It is therefore necessary for a firm to understand the underlying sources of competitive forces (Porter, 1980). Porter further noted that competition in an industry is rooted in its underlying economic structures and goes beyond the behavior of current competitors. Hitt (2003) also defined competitive strategy as a distinctive approach that a firm uses to succeed in the market. He further explained that formulation of competitive strategy includes consideration of firms strength and weaknesses, industry opportunities and threats, personal values of key implementers and broader societal expectations. An organization can adopt an effective competitive strategy after conducting situational and competitor analysis. Understanding the situation of the firm requires identifying the strengths and weaknesses of the firm as well as opportunities and threats facing the firm (Hitt, 2003). Competitor analysis involves understanding your competitors in the industry. Competitors in an industry refer to firms that sell the same product. A firm should be in a position to analyze competitors systems and processes, competitors marketing strategies, competitor s future goals and competitor s current competitive positions (Zhang & Lado, 2001). This information will help the firm to plan the best strategy to apply so as to be ahead of competitors. A firm is said to possess competitive advantage over its rivals when it sustains profits that exceed the average for its industry. The goal of business strategy is to achieve a competitive advantage. A firm gains this advantage by adopting competitive strategy in its business units. Porter (1980), proposed that there are three sources of competitive advantage namely; cost leadership, differentiation and focus. 2. Literature Review Competitive advantage grows out of value a firm is able to create for its buyers that exceeds the firm's cost of creating it (Porter, 2007). Value is what buyers are willing to pay, and superior value stems from offering lower prices than competitors for equivalent benefits or providing unique benefits that more than offset a higher price. According to Peteraf, (1993) at the most fundamental level, firms create competitive advantage by perceiving or discovering new and better ways to compete in an industry and bringing them to market, which is ultimately an act of innovation. Porter, (1980) notes that innovations shift competitive advantage when rivals either fail to perceive the new way of competing or are unwilling or unable to respond. There can be significant advantages to early movers responding to innovations, particularly in industries with significant economies of scale or when customers are more concerned about switching suppliers (Barney, 2002). The most typical causes of innovations that shift competitive advantage are the following: new technologies, new or shifting buyer needs, the emergence of a new industry segment, shifting input costs or changes in government regulations. Besides watching industry trends at the level of strategy implementation, competitive advantage grows out of the way firms perform discrete activities and conceiving new ways to conduct activities, employing new procedures, new technologies, or different inputs. The fit of different 881

3 K. Damaris & M. Oloko strategic activities is also vital to lock out imitators. Porter s value chain is a systematic way of examining all the activities a firm performs and how they interact. It scrutinizes each of the activities of the firm as a potential source of advantage (Porter, 2007). The value chain maps a firm into its strategically relevant activities in order to understand the behavior of costs and the existing and potential sources of differentiation. Differentiation results, fundamentally, from the way a firm's product, associated services, and other activities affect its buyer's activities. All the activities in the value chain contribute to buyer value, and the cumulative costs in the chain will determine the difference between the buyer value and producer cost (Porter, 2007). A firm gains competitive advantage by performing these strategically important activities more cheaply or better than its competitors (Awazu, 2004). One of the reasons the value chain framework is helpful is because it emphasizes that competitive advantage can come not just from great products or services, but from anywhere along the value chain (Porter, 2007). It's also important to understand how a firm fits into the overall value system, which includes the value chains of its suppliers, channels, and buyers (Brandenburger, 1996). Porter (1996) builds on his ideas of generic strategy and the value chain to describe strategy implementation in more detail. Competitive advantage requires that the firm's value chain be managed as a system rather than a collection of separate parts. As Chuang, (2004) states, choices determine not only which activities a company will perform and how it will configure individual activities, but also how they relate to one another. This is crucial, since the essence of implementing strategy is in the activities choosing to perform activities differently or to perform different activities than rivals (Fahy, 2002). A firm is more than the sum of its activities and a firm's value chain is an interdependent system or network of activities, connected by linkages (Porter, 1996). Linkages occur when the way in which one activity is performed affects the cost or effectiveness of other activities. There are two basic types of competitive advantage: cost leadership and differentiation mainly defined by Michael porter s generic strategies. Kaleka, (2002) agrees with Porter that a firm's relative position within an industry is given by its choice of competitive advantage (cost leadership vs. differentiation) and its choice of competitive scope. (Porter, 1987) argues that firms position itself by leveraging its strengths which ultimately fall into one of two headings: cost advantage and differentiation. By applying these strengths in either a broad or narrow scope, three generic strategies result: cost leadership, differentiation, and focus (Porter, 1997). These strategies are applied at the business unit level. They are called generic strategies because they are not firm or industry dependent (Porter, 1997). 3. Methodology The study relied on simple random sampling to pick respondents to form the sample size. Both closed ended and open ended questionnaires were used so as to gather necessary data in accordance with the objectives of the research study. Descriptive statistics such as means, standard deviation, frequency distribution and percentages will be used to analyze the data. 4. Results and Discussion The researcher focused on the 28 clothing retailers licensed and listed by Thika municipal council. Out of the 28 stores 3 respondents were picked making the target population 84. The response rate was 62 out of the 84 questionnaires making it 74%. From the findings, majority of the stores at (58%) have been in operation for between 1-5 years and 30% have been around for more than 5 years while the remaining 12% have operated in Thika town for less than a year. This means that majority of the stores have been in operation for at least a long time hence they are in a position to explain the strategies that have worked and which ones have not. The goal of a company when pursuing a cost leadership strategy is to outperform competitors by doing everything to produce goods and services at a cost lower than the competitors. Because of its lower costs the cost leader is able to charge a lower premium than its competitors and yet make the same level of profit. The pricing technique used by the stores was investigated and from the study offering price discounts was seen as a way of gaining competitive advantage since the majority of respondents at 882

4 (51%) strongly agreed. and retention of qualified employees was the lowest at (18%). Offering price discounts was found to be the most preferred item in cost leadership strategy while employment and retention of highly qualified employees was the least preferred method. This means that most of the stores chose to offer price discounts in order to attract more customers and hence gain competitive advantage. Even though retention of key qualified employees for a long period in the firms has been known to increase efficiency and lowers the cost of recruitment and training most of the clothing retailers still do not consider it as an option. The second objective of the study was to establish the relationship between differentiation strategies and competitive advantage of the store. The results indicated that having superior products at (45 %) had the highest score and offering product guarantees at (27%) was the lowest. The mean score for differentiation was found to be 3.07 hence the most preferred differentiation strategy by the clothing retailers was having superior products while the least preferred was offering product guarantees with a mean of 4.59 and 2.30 respectively. The main objective of the generic differentiation strategies is to achieve a competitive advantage by creating a product that is perceived to be unique by customers. Packaging of products enables firms to distinguish their products from those of their competitors and make their products appear more unique. From the study a majority at (58%) packaged their products in different sizes to cater for all clients. The third objective of this study was to establish the relationship between the focus strategies and competitive advantage of clothing retailers. The results shows that majority (50%) of the stores focus on maintaining high standards of quality of products and services in order to gain competitive advantage and that customer needs are top priority as well as having a specialized product range for some customers with agreement levels for both at (39%). Another (36%) of the stores strongly agree that they focus on specific regions when marketing their products 5. Summary and Conclusions The specific objectives of this study was to first examine the relationship between cost leadership strategies and competitive advantage of clothing retailers, to establish the relationship between differentiation strategies and competitive advantage and lastly focus strategies and the competitive advantage of clothing retailers. Summaries are made in line with the objectives of the research study where most of the stores studied offer price discounts aimed at attracting customers and building on the client base. This indicates that the stores use price discounts to attract and maintain customers. According to the study majority of the stores do not consider hiring highly qualified staff as a viable method for gaining competitive advantage. On the differentiation strategy, the most preferred method was by having superior products, this was to enable the dairy firms increase their market share. The results indicated that having superior products had the highest score and offering product guarantees was the lowest. It is clear that customers may choose quality products regardless of the prices so as to satisfy their needs. Since the main objective of the differentiation strategies is to achieve a competitive advantage by creating a product that is perceived to be unique by customers. Packaging of products enables firms to distinguish their products from those of their competitors and make their products appear more unique. The results show that all the three strategies have a positive and a significant relationship to the competitive advantage of the clothing stores. The focus strategy was found to have the strongest and most significant relationship with competitive advantage at a mean average of Cost leadership strategy and differentiation strategy both had significant relationship with mean of and respectively. The results show that all the three strategies have positive relationships with competitive advantage; however focus strategy has the strongest relation and may be more relevant for the stores. References Awazu, Y. (2004). Informal network players, Knowledge integration, and competitive of knowledge management, 8: advantage. Journal 883

5 K. Damaris & M. Oloko Barney, J. B. (2002). Gaining and Sustaining Competitive Advantage. 2nd ed, Addison-Wesley Brandenburger, A. (1996). Value-based business strategy. Journal of Economics and Strategy, 5: Management publishers. Chuang, S. (2004). A resource-based perspective on knowledge management capability and competitive advantage: an empirical investigation. Expert Systems with Applications, 27: Fahy, J. (2002). A resource-based analysis of sustainable competitive advantage in a global environment. International Business Review, 11: Hitt, M. A. (2003). Strategic Management: Competitiveness and Globalization. South-Western Publishing, Boston, MA, USA. Kaleka, A. (2002). Resources and capabilities driving competitive advantage in export markets: for industrial exporters. Industrial Marketing Management, 31: College guidelines Kaplinsky, R. (2005). Spreading the Gains from Globalization: What can be learned from Value Chain Analysis?. Institute of Development Studies (IDS), University of Sussex, UK. Peteraf, M. A. (1993). The cornerstones of competitive advantage: A resource-based view. Management Journal, 14: Porter, M. (2001). Strategy and the internet. Harvard Business Review, 62: 78. Strategic Porter, M. E. (1980). Competitive Strategy, Techniques for Analyzing Industries and Competitors. Simon & Schuster Inc, Porter, M. E. (1987). From Competitive Advantage to Corporate Strategy. Harvard Business Review. 3: Porter, M. E. (1996).What is strategy?. Harvard Business Review, 77: Porter, M. E. (1997). How Competitive Forces Shape Strategy. Harvard Business Review, 57: Zhang, M. and Lado, A. (2001). Information systems and competitive advantage: a competency- based view. Technovation, 21: Table 1: Cost Leadership Strategy. Disagree Moderately Disagree Offering low priced products (35%) 12 (20%) 28(45%) Offering price discount (26%) 14 (23%) 32 (51%) Engage in promotional activities (35%) 10(17%) 30 (48%) Prompt services/delivery of products (23%) 28 (45%) 20 (32%) Employment and 27(44%) Retention of highly (38%) 11(18%) qualified employees. 884

6 Table 2: Differentiation Strategy Strong Positive Positive No Negative Strong Negative Having superior and unique products. 28 (45%) 21 (34%) 13 (21%) 0 0 Efficiency of marketing staff. 24 (39%) 22 (35%) 16(26%) 0 0 Location of your premises 26 (42%) 18 (29%) 18 (29%) 0 0 Regular Promotional activities 23 (37%) 22 (35%) 17 (28%) 0 0 Incentives to clients 18 (29%) 25 (40%) 19 (31%) 0 0 offering product guarantees to your customers 17 (27%) 27 (44%) 18 (29%) 0 0 Table 3: Focus Strategy Moderately Disagree Disagree Very high standards of quality of products and services are maintained in the store (15%) 22(35%) 31(50%) Customer needs are top priority in the store (19%) 26(42%) 24(39%) There is a specialized product range for some customers only? 0 0 8(13%) 30(48%) 24(39%) The store focuses on specific regions when marketing their products? (19%) 28(45%) 22(36%) 885