Understanding Porter’s Generic Competitive Strategies and its Effect on Perceived Business Performance: Evidence from a Credit Cooperative

Abstract

The purpose of this research is to examine how Porter's generic competitive strategies specifically in terms of cost leadership strategy, differentiation strategy, and focus strategy affect the perceived business performance of a Credit Cooperative. To better understand the impact of Porter's generic strategies on Credit Cooperative performance, the research used both quantitative and qualitative research approaches. A random sample of 263 were identified and surveyed using structured questionnaire. The online survey was carried out utilizing Google Forms.  The survey resulted to a total of 87 respondents, providing a 33.08% response rate. Additional information derived from three key informants of the organization were utilized for the qualitative analysis using open-ended questions. Correlation and regression analyses were utilized via IBM SPSS Statistics version 26 tool for the treatment of data. The findings show that the Credit Cooperative's perceived overall business performance was influenced by both differentiation and focus strategies, with the differentiation strategy having a positive and direct effect, while focus strategy having an inverse or negative effect on the Credit Cooperative’s overall performance. The study concludes that the Credit Cooperative can achieve higher performance by pursuing relevant competitive practices on Porter’s competitive strategies. The results of the study provides insights to the Cooperative management in choosing the most appropriate competitive strategic practices to implement. This research will add to the body of knowledge on business performance by elucidating the impact of Porter's competitive strategies on the overall performance of a credit cooperative.