Influence of cost leadership strategy on performance of medium scale miners in Taita Taveta County, Kenya

Abstract

Mining is an expensive business and firms have to be cost sensitive in their operations to ensure high performance. Consequently, mining firms such as medium scale miners (MSMs) in Taita Taveta County, Kenya have embarked on competitive strategies such as cost leadership to improve their performance. However, the impact of this strategy on the performance of these firms in the area had not been evaluated. Therefore, the study sought to establish the influence of cost leadership strategy on performance of medium scale miners in Taita Taveta County. Porter‘s Generic Strategies guided the study which adopted a descriptive survey research design targeting 502 miners from 22 registered groups and 13 companies operating as medium scale miners in the region. From these a sample of 222 was selected for the study using simple random sampling. Data was collected using copies of questionnaire and was analyzed using descriptive statistics involving frequencies and percentages. The findings revealed that application of cost leadership strategy by MSMs in the area led to reduced costs of operation, increased production outputs and profitability. It is, therefore, recommended that the MSMs pursue the more competitive cost per unit of input technique which is more sustainable than just cost reduction.

Keywords: Cost leadership, Medium scale miners, Performance, Kenya