Abstract:
The purpose of the study was to assess the extent to which is differentiation strategy influences
selected supermarkets' performance in Kenya’s County of Nairobi City. A descriptive research
design was used. The study’s unit of analysis was nine supermarkets situated in Nairobi City
County. The study respondents included 63 employees from selected supermarket’s functional
departments including the following functional managers (Managing Director, Purchasing and
Supply Chain, Operations, ICT, Finance, Human Resources, Business Development, and
Marketing). The study employed census method. The questionnaire which comprised of semistructured
questions was the instrument applied during collection of both quantitative and
qualitative data. Validity and reliability results were tested in the study. Expert judgement was
used to test validity while reliability was tested using Cronbach’s alpha. All the study variables
were found to be reliable and valid. SPSS software analyzed qualitative data through
descriptive statistics like means, standard deviations, and inferential statistics of regression
analysis. Presence of a positive and significant link between performance and differentiation
strategy (with β=0.629 and p=0.000) was recognized. Differentiation strategy was also found
to significantly and positively impact performance. Higher differentiation levels lead to
increased performance of selected supermarkets. Innovation and new product introduction by
supermarkets enhanced its performance. Functional managers should create and implement
strategies to minimize operational costs and reduce commodity prices. Product innovation
should be sustained to fast-track product differentiation, enhance competition, and create
barriers to entry in the market. Technology adoption should also be fast-tracked in all
supermarket processes to enhance efficiency as well as effectiveness
