Business Location as a Catalyst for Competitive Advantage of Small Hospitality Enterprises in Eldoret, Kenya
Abstract
Competitive advantage can result from the business location which offers an organization with an edge over its opponents as well as an ability to produce better value for the company. The choice of the right location is imperative to enterprise success as customers are motivated to transact within a location suitable to their needs. Crucial for identifying appropriate location are characteristics that provide enterprises an edge over competitors. This study investigated business location factors that catalyze competitive advantage of small hospitality enterprises in Eldoret town. Specifically, business location factors included accessibility, convenience, security and uncrowded area tested against competitive advantage. Four null hypotheses were tested. The study adopted explanatory research design with a sample size of 142 business persons from a target population of 221 businesses. Systematic sampling was used to identify the respondents whereas data was collected using questionnaires containing structured and unstructured questions. Factor analysis revealed that two components, accessibility and security adequately explained business location with the potential to influence competitive advantage of small hospitality enterprises. Multiple linear regression established that business location explained 53.3% (R2=0.533) variance on competitive advantage. The study rejected three null hypotheses that accessibility (B=0.240, p<0.05), security (B=-0.190, p<0.05) and convenience (B=0.301, p<0.05) do not influence competitive advantage and accepted the null hypothesis that uncrowded areas (B=0.043, p>0.05) do not influence competitive advantage. Conclusively, accessibility, security and convenience influence competitive advantage while uncrowded areas do not. Therefore, businesspersons operating small hospitability enterprises should choose their business locations keenly by ensuring accessibility and security of customers.
References
Ashworth, G. J., & Tunbridge, J. E., (2000). The Tourist-Historic City. Retrospect and Prospect of Managing the Heritage City. Elsevier, London.
Barney, J. (2001). Is the resource-based ‘view’ a useful perspective for strategic management research? Yes. Academic of Management Review, 2 (1), January, 41–56.
Barros, C. P., (2005a). Evaluating the efficiency of a small hotel chain with a Malmquist productivity index. International Journal of Tourism Research, 7(3), 173-184.
Barros, C. P., (2005b). Measuring efficiency in the hotel sector. Annals of Tourism Research, 32(2), 456-477.
Baumol, W., Panzar, J., & Willig, R. (1982). Contestable Markets and the Theory of Industry Structure. New York: Harcourt, Brace and Jovanovich.
Buček, M., Rehák, Š., Tvrdoň, J. (2010). Regionálna ekonómia a politika. Bratislava.: Iura Edition, 2010. ISBN 978-80-8078-362-4.
Budner, W. (2004). Lokalizacja przedsiębiorstw. Aspekty ekonomiczno-przestrzenne i środowiskowe., Akademia Ekonomicza w Poznaniu, 2004. ISBN 83-89224-08-9.
Canina, L., Enz, C. A., & Harrison, J. S., (2005). Agglomeration effects and strategic orientations: Evidence from the U.S. lodging industry. Academy of Management Journal, 48(4), 565-581.
Christensen, K. and Fahey, L. (1984), “Building distinctive competencies into competitive advantage”, Strategic Planning Management, February, pp. 113-23.
Chung, W., & Kalnins, A., (2001). Agglomeration effects and performance: A test of the Texas lodging industry. Strategic Management Journal, 22(10), 969-988.
Cohen, S. (2013). What Do Accelerators Do? Insights from Incubators and Angels. Innovations Technology Governance Globalization, 8(3): 19-25
Cuervo-Cazurra, A., Maloney, M.M., Manrakhan, S. (2007). Causes of the difficulties in internationalization. Journal of International Business Studies, 38 (5) (2007), Pages 709–725
Dočkalíková, I., and Klozíková, J. (2016). Analysis of the factors of localization of the company development using MCMD methods in practice. 10th International Days of Statistics and Economics, SEP 08-10, 2016, Pages 354-363
Draugalis, J.R., Coons, S.J., and Plaza, C.M. (2008). Best Practices for Survey Research Reports: A Synopsis for Authors and Reviewers. American Journal of Pharmaceutical Education, 72 (1): 11: 1-6
Dubé, J., Brunelle, C., & Legros, D. (2016). Location theories and business location decision: A micro-spatial investigation in Canada. The Review of Regional Studies, 46(2), 143–170
Egan, D. J., Chen, W., & Zhang, Y., (2006). The intra-urban location of hotels in the Chinese cities of Beijing, Shanghai & Shenzhen. China Tourism Research, 2(4), 516-530.
Egan, D. J., & Nield, K., (2000). Towards a theory of intraurban hotel location. Urban Studies, 37(3), 611-621.
Ghosh, A., & McLafferty, S. L. (1982). Locating stores in uncertain environments: A scenario planning approach. Journal of Retailing, 58 (14), 5-22.
Grant, R. (2008). Contemporary Strategy Analysis. Oxford: Blackwell Publishing Ltd.
Hair, J. F., Anderson, R. E., Tatham, R. L., & Black, W. C. (2005). Multivariate data analysis. New Jersey: Prentice-Hall.
Hitt, M., Ireland, D. and Hoskisson (1997). Strategic management: Competitiveness and globalization. West Publishing Company.
James, D. L., Walker, B. J., & Etzel, M. J. (1975). Retailing today. New York: Harcourt Brace Jovanovich, Inc.
Korir, J. (2012). Elements of Event Management Ventures in Kenya. European Journal of Business and Management, Vol. 4(16), 81-86
Mariani, J. (2001, Aug). The implications of your location. Restaurant Hospitality, 85, pp.20.
Mason, J. B., Mayer, M. L, & Ezell, H. F. (1988). Retailing (3rd ed.) Plano, Texas: Business Publications, Inc. 65
McGuire, K. J. (1993). Site selection and territorial issues. In A. J. Sherman (Ed.), The franchising handbook (pp. 103-116). New York: American Management Association.
Nelson, R. L. (1958). The selection of retail locations. New York: F. W. Dodge Corporation. 66
Passemard, D. and Kleiner, B.H,(2000) "Competitive advantage in global industries", Management Research News, Vol. 23 Iss 7/8 pp. 111 - 117
Perlik, A. (2001, Jun 1). Treasure hunt. Restaurants and Institutions, pp. 57-60.
Peteraf, M. (1993). The cornerstones of competitive advantage: A resource‐based view. Strategic Management Journal, 14, 179‐191.
Porter, M.E. (1980). Competitive strategy: Techniques for analyzing industries and competitors. Free Press.
Porter, M. (1985). Competitive advantage: Creating and sustaining superior performance. New York: Free Press.
Porter, M. E. (1998). Clusters and the new economics of competition, Harvard Business Review, Nov/Dec98, Vol. 76 Issue 6, p77
Prahalad, C., & Hamel, G. (1990). The core competence of the corporation. Harvard Business Review (Vol. 68), 79‐91.
Roberts, P. W. & Dowling, G.R.(2002). Corporate reputation and sustained superior financial performance. Strategic Management Journal, 23,1077-1093.
Scarborough, N.M. (2010). Essentials of Entrepreneurship and Small Business Management. (6thEdition). New Jersey:Prentice Hall.
Scarborough, N.M. and Zimmerer T.W. (1996). Effective Small Business Management. (5thEdition). New York: Prentice Hall.
Shoval, Noam (2006). The Geography of Hotels in Cities: An Empirical Validation of a Forgotten Model. Tourism Geographies, 8 (1): 56-75
Snieska, V., Zykiene, I., and Burksaitiene, D. (2019). Evaluation of location’s attractiveness for business growth in smart development. Economic Research-Ekonomska Istraživanja. 32. 925-946. 10.1080/1331677X.2019.1590217.
Standard and Poor’s. (2001, February 22). Restaurants Industry Survey.
Szymańska, A. I., Płaziak, M. (2014). Enterprise and Classical Factors of its Location on the Market. Procedia – Social and Behavioral Sciences, Volume 120, 19 March 2014, Pages 13-22, 3rd International Geography Symposium, GEOMED2013, 10-13 June 2013, Antalya, Turkey
Thompson A., and Strickland A.J., (2002), Strategic Management: Concepts and Cases, Irwin: New York.
Výrostová, E. (2010). Regionálna ekonomika a rozvoj. Bratislava: Iura Edn, 2010. ISBN 978-80-8078-361-7.
Wall, G., Dudycha, D., & Hutchinson, J., (1985). Point pattern analyses of accommodation in Toronto. Annals of Tourism Research, 12(4), 603-618.
Weaver, D.B. (1993). Model of urban tourism for small Caribbean islands. Geographical Review, 83 (2), pp.134-140.
Weber, A., Friedrich, C.J. (1929). Alfred Weber's theory of the location of industries. Chicago, Ill., The University of Chicago Press, 1929
Wernerfelt, B. (1984). A resource based view of the firm. Strategic Management Journal, 171-180.
Yamane, Taro. (1967). Statistics: An Introductory Analysis, 2nd Edition, New York: Harper and Row.
Yokeno, N., (1968). La localisation de l' industrie touristique: application de l’analyse de Thunen-Weber. Paper presented at the Cahiers du Tourisme, Aix-en-Provence: C.H.E.T.
