EFFECT OF COST LEADERSHIP STRATEGY ON ORGANIZATIONAL PERFORMANCE OF LOGISTICS FIRMS AT JOMO KENYATTA INTERNATIONAL AIRPORT, KENYA

Abstract

This paper looks at how logistics firms operating at Kenya’s premier airport; Jomo Kenyatta International Airport, Nairobi use cost leadership strategy to drive their performance. The study therefore looked at the degree to which application of cost leadership strategies resulted to performance improvement. This research was guided by Porters five forces theory. The study was informed by explanatory research design. It targeted a population of 151 respondents and a sample size of 110 top and middle level management forming the study population. The study data came from 10 logistics firms with active websites operating at JKIA Nairobi. The respondents identified were selected using simple random sampling technique. A questionnaire based on the variables of the study wasused to collect data from respondents. Analysis of data involved use of descriptive and inferential statistics. It was found out that cost leadership had a significant positive effect (p<0.05) on logistics firms performance. it was found out that as a result of utilising this approach, there was increased sales volume and profits. Further, there was reduction of costs associated with operations that resulted to increased profit margin. The paper recommends that there is need for all logistics firms to consider integrating cost leadership aspects in all their departments and sections of the organisation.