Cost Leadership Strategy Implementation and Organizational Performance of Financial Technology Firms in Kenya

Eliud M Obanda; Joyce W Ndegwa; Timothy C Oketch

doi:10.59952/tuj.v7i1.375

Authors

Eliud M Obanda United States International University – Africa
Joyce W Ndegwa United States International University – Africa
Timothy C Oketch United States International University – Africa

Keywords:

Cost leadership strategy, Financial technology firms, Organizational performance

Abstract

The purpose of this study was to analyze the influence of cost leadership strategy implementation on organizational performance of financial technology (Fintech) firms in Kenya. The study was anchored on Porter’s competitive advantage theory. Positivism research philosophy and a descriptive survey research design were used. The study population was 120 financial technology firms in Kenya, from which a sample of 276 managers was obtained based on 92 selected firms. Primary data was collected from the managers using a structured questionnaire. Descriptive statistics and inferential statistics were used to analyze the data collected. The findings established that cost leadership strategy implementation has a statistically significant and positive influence on the organizational performance in the fintech firms in Kenya (β = 0.551, t = 10.157, p < 0.05). The study concluded that the implementation of a cost leadership strategy enhances the organizational performance of financial technology firms. The study recommends that financial technology firms should invest in advanced technologies such as artificial intelligence and machine learning to ensure efficiency. For regulatory agencies and policymakers like Central Bank of Kenya, the study recommends that fintech firms ensure compliance with financial regulations to avoid legal penalties that could increase operational costs. Fintech companies should also foster an environment that encourages creative problem-solving and continuous improvement. Considering the scope limitations of this study, the study recommends that future research extend to other sectors and regions to compare effects, and emphasize the value of longitudinal studies to track strategic impacts over time.

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