Innovation-Enabled Cost Leadership and Firm Competitiveness: Evidence from Bronze-Accredited Hospitality Facilities in Kenya
DOI:
https://doi.org/10.54536/ajth.v4i2.7606Keywords:
Bronze-Accredited Hospitality Facilities, Competitiveness, Cost Leadership Strategy, Innovation, Strategic ManagementAbstract
Despite the widespread adoption of the cost leadership strategy as a means of achieving competitive advantage in the hospitality sector, its effectiveness in resource-constrained environments remains uncertain. This study examined the relationship between cost leadership strategy and the competitiveness of Bronze-Accredited Hospitality Facilities (BAHFs) in Kenya, with innovation as a mediating variable, using a quantitative cross-sectional research design. The unit of observation comprised 347 BAHFs, with data collected from two respondents in each facility (a manager and a supervisor), yielding a total of 694 targeted respondents. A response rate of 84.9% (589 valid responses) was achieved using structured questionnaires. The data were analyzed using Covariance-Based Structural Equation Modeling (CB-SEM). The results indicate that the cost leadership strategy has a positive and statistically significant effect on competitiveness (β = 0.295, p < 0.001). However, when innovation is introduced into the model, the direct effect remains statistically significant but is reduced (β = 0.118, p = 0.027), while the indirect effect through innovation is also significant (β = 0.200, p < 0.05), confirming partial mediation. The study concludes that competitiveness in BAHFs is achieved through both direct cost efficiency and innovation-enabled strategic execution. Accordingly, it recommends that managers integrate innovation into cost leadership strategies to enhance operational efficiency, service quality, and sustained competitiveness in resource-constrained hospitality environments.
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