BLUE OCEAN STRATEGY AND ORGANIZATIONAL PERFORMANCE OF 
JOMO KENYATTA INTERNATIONAL AIRPORT FREIGHT MANAGEMENT 

COMPANIES IN KENYA 

 

by 

 

Getrude Gatwiri Murithi 

 

 

A Thesis presented to the School of Business and Economics 

 

of 

 

Daystar University 

Nairobi, Kenya 

 

 

In partial fulfilment of the requirements for the degree of 

 

MASTER OF BUSINESS ADMINISTRATION 

in Strategic Management  
 

 

 

October 2024 

 

Daystar University Repository

Library Archives Copy



 

ii 
 

DECLARATION  

BLUE OCEAN STRATEGY AND ORGANIZATIONAL PERFORMANCE OF 
JOMO KENYATTA INTERNATIONAL AIRPORT FREIGHT MANAGEMENT 

COMPANIES IN KENYA 

 

This thesis is my original work and has not been presented for a degree in any other 
university or any other award. 

 

 

 Signed:                                                                   Date:  
 Getrude Gatwiri Murithi 
 21-1545 

 

We confirm that the work presented in this thesis was carried out by the student under 
our 

Supervision. 
 

 Signed:                                                                        Date:  
 

 

 

 

 Eunice Wandiga, PhD. 
 1st Supervisor 

 

 Signed:                                                                                 Date:  
 

 

 

 

Moses Murimi, PhD.                                                                                      
2nd Supervisor  

 

Daystar University Repository

Library Archives Copy



 

iii 
 

 

 

 

 

 

 

 

 

 

Copyright © 2024 Getrude Gatwiri 

 

 

 

 

 

 

 

 

 

 

Daystar University Repository

Library Archives Copy



 

iv 

 

APPROVAL 

 

BLUE OCEAN STRATEGY AND ORGANIZATIONAL PERFORMANCE OF 
JOMO KENYATTA INTERNATIONAL AIRPORT FREIGHT MANAGEMENT 

COMPANIES IN KENYA 

 

Gertrude Gatwiri Murithi 
21-1545 

 

 

In accordance with Daystar University policies, this thesis is accepted in partial 
fulfillment of 

requirements for the Master of Business Administration in Strategic Management 
 

Signed:                                                                            Date 

  
 

  
Joseph Munyao, MSc. 
HOD, Commerce Department 
 

 

 Signed:                                                                       Date 

 

                                                                       
                                                              
 

Laban Chesang, PhD.  
Dean, School of Business and Economics 

 

 

 

Daystar University Repository

Library Archives Copy



 

v 

 

ACKNOWLEDGEMENT 

To begin, I offer my deepest gratitude to God, who has provided me with the fullness 

of spirit, soul, and body throughout the process of writing this thesis. His unwavering 

strength, encouragement, good health, and wisdom were vital in its completion, and I 

am forever thankful for His faithfulness. 

I would also like to extend my sincere appreciation to my supervisors, Dr. Eunice 

Wandiga and Dr. Moses Murimi, whose guidance, professional insight, and invaluable 

support were pivotal during this journey. Without their contributions, the successful 

completion of this thesis would not have been possible. My heartfelt thanks also go to 

the lecturers at Daystar University, whose teachings during my coursework laid the 

foundation and framework for this thesis. 

A special note of gratitude is owed to my beloved daughter. Your unwavering support, 

both moral and spiritual, has been my constant source of strength, especially when the 

path was challenging. Your encouragement inspired me to keep going even when I felt 

like giving up. I also extend my deepest thanks to my parents for their endless love and 

encouragement throughout this journey. 

Finally, I wish to express my appreciation to my colleagues, friends, and everyone who, 

although not individually mentioned, supported me in various ways throughout this 

academic endeavor. To each of you, I extend my heartfelt thanks, and may God richly 

bless you all. 

 

 

 

 

 

 

 

 

 

Daystar University Repository

Library Archives Copy



 

vi 
 

DEDICATION 

I dedicate this work to my beloved daughter Nanga Kanana and my parents Mr. Gilbert 

Murithi and Mrs. Florence Murithi whose unwavering support and love has been my 

greatest source of strength and inspiration. Your presence in my life motivates me to 

strive for greater heights. This achievement is as much yours as it is mine. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Daystar University Repository

Library Archives Copy



 

vii 
 

TABLE OF CONTENTS 

DECLARATION ........................................................................................................... ii 

APPROVAL ................................................................................................................. iv 

ACKNOWLEDGEMENT ............................................................................................. v 

DEDICATION .............................................................................................................. vi 

LIST OF TABLES ........................................................................................................ ix 

LIST OF FIGURES ....................................................................................................... x 

LIST OF ACRONYMS AND ABBREVIATIONS ..................................................... xi 

ABSTRACT ................................................................................................................. xii 

CHAPTER ONE ............................................................................................................ 1 

INTRODUCTION AND BACKGROUND TO THE RESEARCH PROBLEM.......... 1 

Introduction ........................................................................................................ 1 

Background to the Research Problem ................................................................ 3 

Statement of the Problem ................................................................................. 16 

Purpose of the Study ........................................................................................ 18 

Objectives of the Study .................................................................................... 18 

Research Questions .......................................................................................... 18 

Significance of the Study ................................................................................. 19 

Justification of the Study ................................................................................. 19 

Assumptions of the Study ................................................................................ 20 

Scope of the Study ........................................................................................... 20 

Limitations and Delimitations of the Study ..................................................... 21 

Operational Definition of Terms ...................................................................... 22 

Chapter Summary ............................................................................................ 23 

CHAPTER TWO ......................................................................................................... 24 

LITERATURE REVIEW ............................................................................................ 24 

Introduction ...................................................................................................... 24 

Theoretical Framework .................................................................................... 24 

General Literature ............................................................................................ 31 

Empirical Literature Review ............................................................................ 43 

Conceptual Framework .................................................................................... 50 

Discussion ........................................................................................................ 51 

Chapter Summary ............................................................................................ 52 

CHAPTER THREE ..................................................................................................... 53 

RESEARCH METHODOLOGY................................................................................. 53 

Introduction ...................................................................................................... 53 

Research Design............................................................................................... 53 

Population ........................................................................................................ 54 

Target Population ............................................................................................. 54 

Sample Size ...................................................................................................... 55 

Sampling Technique ........................................................................................ 56 

Types of Data ................................................................................................... 57 

Data Collection Instruments ............................................................................ 57 

Pre-testing ........................................................................................................ 58 

Reliability and Validity .................................................................................... 58 

Data Collection Procedures .............................................................................. 60 

Data Analysis Plan and Presentation ............................................................... 60 

Ethical Considerations ..................................................................................... 63 

Chapter Summary ............................................................................................ 63 

CHAPTER FOUR ........................................................................................................ 64 

Daystar University Repository

Library Archives Copy



 

viii 
 

DATA PRESENTATION, ANALYSIS AND DISCUSSION OF FINDINGS .......... 64 

Introduction ...................................................................................................... 64 

Data Presentation, Analysis and Interpretation ................................................ 65 

Years of operation ............................................................................................ 68 

Discussion of Findings ..................................................................................... 92 

Summary of Key Findings ............................................................................... 98 

Chapter Summary .......................................................................................... 101 

CHAPTER FIVE ....................................................................................................... 102 

CONCLUSIONS AND RECOMMENDATIONS .................................................... 102 

Introduction .................................................................................................... 102 

Conclusion ..................................................................................................... 102 

Recommendations .......................................................................................... 104 

Recommendations for Areas for Further Research ........................................ 105 

REFERENCES .......................................................................................................... 106 

APPENDICES ........................................................................................................... 123 

Appendix I: Research Questionnaire ............................................................. 123 

Appendix II: Freight Management Companies in JKIA ................................ 128 

Appendix III: Ethical Clearance .................................................................... 130 

Appendix IV: Research Permit ...................................................................... 131 

Appendix V: Similarity Index Report ............................................................ 132 

 

 

 

 

 

 

 

 

 

 

 

 

 

Daystar University Repository

Library Archives Copy



 

ix 

 

LIST OF TABLES 

Table 1: Summary of Research Gaps........................................................................... 48 

Table 2: Population ..................................................................................................... 54 

Table 3: Target Population .......................................................................................... 55 

Table 4: Sample Size .................................................................................................... 56 

Table 5: Reliability Results .......................................................................................... 60 

Table 6: Response Rate ................................................................................................ 64 

Table 7: Gender of the Respondents ............................................................................ 65 

Table 8: Age of the Respondents .................................................................................. 66 

Table 9: Highest Level of Education ........................................................................... 67 

Table 10: Scope of Operations .................................................................................... 68 

Table 11: Years of Operation ...................................................................................... 68 

Table 12: Respondent’s Job Position .......................................................................... 69 

Table 13: Differentiation ............................................................................................. 70 

Table 14: Cost Leadership ........................................................................................... 73 

Table 15: Value Creation............................................................................................. 76 

Table 16: Organizational Performance ....................................................................... 79 

Table 17: Organizational Culture ............................................................................... 82 

Table 18: Correlation Analysis .................................................................................... 85 

Table 19: Model Summary ........................................................................................... 87 

Table 20: ANOVA ........................................................................................................ 87 

Table 21: Regression Coefficients ............................................................................... 88 

Table 22: Model Summary for BOS and performance ................................................ 89 

Table 23: ANOVA for BOS and performance .............................................................. 89 

Table 24: Regression coefficients for BOS and performance ...................................... 90 

Table 25: Model Summary with the moderating variable ........................................... 90 

Table 26: ANOVA ........................................................................................................ 91 

Table 27: Regression Co-efficients .............................................................................. 91 

 

 

 

 

 

 

 

 

 

Daystar University Repository

Library Archives Copy



 

x 

 

LIST OF FIGURES 

Figure 1: Theoretical Framework ............................................................................... 31 

Figure 2:  Conceptual Framework .............................................................................. 51 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Daystar University Repository

Library Archives Copy



 

xi 
 

LIST OF ACRONYMS AND ABBREVIATIONS 

BOS: Blue ocean strategy 

DU-ISERC Daystar University Institutional Scientific and Ethical Review 

Committee 

GDP: Gross Domestic Product 

IATA: International Air Transport Association 

IoT: Internet of Things 

JKIA: Jomo Kenyatta International Airport 

KIFWA: Kenya International Freight and Warehousing Association 

LPI: Logistics performance index  

NACOSTI:  National Commission for Science, Technology & Innovation  

RBV: Resource Based View 

ROI: Return on Investment 

SPSS Statistical Package for the Social Sciences 

 

 

 

 

 

Daystar University Repository

Library Archives Copy



 

xii 
 

ABSTRACT 

The freight management companies at Jomo Kenyatta International Airport in Nairobi, 
Kenya are facing significant performance challenges caused by market saturation and 
increasing operation cost. Furthermore, profit margins for many freight forwarders and 
cargo handling companies operating at JKIA are under pressure, with some reporting 
declines of 10-15% over the past 3 years. The purpose of this study was to investigate 
the effect of blue ocean strategy on performance of JKIA freight Management 
Companies in Kenya. The specific objectives were to assess the extent of adoption of 
blue ocean strategy by JKIA freight Management Companies in Kenya, to evaluate the 
organizational performance of JKIA freight Management Companies in Kenya and to 
determine the effect of blue ocean strategy on organizational performance of JKIA 
freight Management Companies in Kenya. The study further sought to determine the 
moderating effect of organizational culture on the relationship between blue ocean 
strategy and organizational performance of JKIA freight Management Companies in 
Kenya. It was anchored on the Resource Based View and dynamic capabilities Theory. 
The study employed descriptive and explanatory research design. The population in this 
study was all the 40 freight management companies in JKIA. The target population was 
all the 534 top and middle level management employees in the freight management 
companies in JKIA. A sample of 229 employees was selected using stratified random 
sampling technique. This study collected primary data using a structured questionnaire. 
Data analysis entailed descriptive and inferential statistics. The descriptive statistics 
include means, frequencies and standard deviations while inferential statistics entailed 
Pearsons’s correlation and multiple linear regression analysis. The study revealed that 
JKIA freight management companies have adopted various aspects of the Blue Ocean 
Strategy, including differentiation, cost leadership, and value creation, all of which 
significantly contribute to their organizational performance. Most firms have 
implemented advanced technologies, customized services, lean management practices, 
and flexible pricing, which have improved operational efficiency and customer 
satisfaction. Additionally, the study found that a positive and significant relationship 
exists between Blue Ocean Strategy elements and performance (β=0.879,p=0.002), and 
that organizational culture moderates and the relationship between BOS and 
performance(β=0.227,p=0.006). It was concluded that most JKIA freight management 
companies have adopted Blue Ocean Strategy.  It was concluded that the firms have 
automated logistics processes to increase productivity and reduce labor costs. It was 
also concluded that the companies excel in shipment accuracy, timeliness, and 
minimizing damage, but there is room for improvement in fleet management. It was 
also concluded that differentiation, cost leadership, and value creation significantly 
influence performance. It was as well concluded that organizational culture, enhances 
the relationship between Blue Ocean Strategy and performance in these firms. Based 
on the study’s findings, it was recommended that the companies may continue 
optimizing their transportation routes and modes to reduce fuel consumption and 
delivery expenses while expanding the adoption of fuel-saving technologies. These 
firms may also deepen their investment in automation and lean management techniques 
to further eliminate waste, enhance operational efficiency, and reduce labor costs.  

Daystar University Repository

Library Archives Copy



 

 

 

CHAPTER ONE 

INTRODUCTION AND BACKGROUND TO THE RESEARCH PROBLEM 

Introduction 

Freight management companies specialize in coordinating and overseeing the 

transportation of goods from one location to another. They manage various logistical 

aspects, such as cargo handling, storage, and documentation, ensuring that goods move 

efficiently through supply chains (Muñoz-Villamizar et al.,2020). These companies 

often collaborate with airlines, shipping lines, and trucking firms to provide 

comprehensive transportation solutions tailored to their clients ‘needs (Bertalero et al., 

2020). Their services include route planning, cargo consolidation, and real-time 

tracking, which help optimize the movement of goods and reduce costs (Sales & 

Scholte, 2023). In addition to transportation, freight management companies offer 

ancillary services like customs clearance, warehousing, and distribution. They handle 

the complex regulatory requirements associated with international trade, ensuring that 

shipments comply with local and international laws (Van Asch et al., 2019). 

Performance of freight management companies is crucial in the context of global supply 

chain efficiency and economic growth. According to Bharadwaj (2020), effective 

freight management ensures timely delivery of goods, which is vital for maintaining 

the seamless flow of the supply chain. Efficient freight management minimizes delays 

and reduces transportation costs, contributing to the overall firm performance. Most 

importantly, it enhances customer satisfaction by ensuring that products reach their 

destinations as scheduled, thus meeting or exceeding customer expectations (Muhalia 

et al, 2021). This efficiency is critical in industries where just-in-time inventory systems 

are implemented, as any disruption in the freight process can lead to significant 

Daystar University Repository

Library Archives Copy



 

2 

 

operational bottlenecks (Anis & Muhamad, 2024). Additionally, Özcan et al. (2023) 

argue that the performance of freight management companies directly impacts a 

nation’s economic health by facilitating international trade and commerce, thereby 

contributing to GDP growth. 

Jepherson et al. (2021) point out that the environmental sustainability of logistics 

operations is increasingly becoming a priority and efficient freight management 

practices can lead to a reduction in carbon emissions by optimizing routes and 

improving load management.  This is particularly important in the current global 

context, where businesses are under pressure to adopt sustainable practices. Kumar 

(2021) avers that, robust freight management practices enable exporting companies to 

quickly respond to unexpected events such as natural disasters, geopolitical tensions, 

or pandemics, thereby maintaining supply chain continuity. This agility is essential for 

minimizing the impact of such disruptions on business operations and ensuring that 

critical goods, including medical supplies and food products, are delivered without 

undue delay (Holguín-Veras et al., 2020). 

The dynamic environment for freight management companies is increasingly dynamic, 

as the firms are contending for market share, customer loyalty, and operational 

efficiencies (Ghajiga et al., 2023). These companies are continually working to enhance 

their service offerings, focusing on factors such as speed, reliability, and cost-

effectiveness to attract clients. This pressure is driving firms to adopt innovative 

strategies, including value-added services like real-time tracking and customized 

logistics solutions (Hesborn, 2023).  

Blue ocean strategy, as conceptualized by Kim and Mauborgne (2005) are 

transformative approaches that encourages organizations to move away from highly 

competitive, saturated markets (red oceans) and instead create new, uncontested market 

Daystar University Repository

Library Archives Copy



 

3 

 

spaces (blue oceans). According to Kim et al. (2005), this strategy involves innovation 

and value creation that helps in tapping into unexplored areas of demand. Notably, the 

Blue Ocean Strategy emphasizes differentiation and low cost simultaneously, allowing 

firms to break the trade-off between value and cost, thereby achieving significant 

growth and profitability (Yunus & Sijabat, 2021). Findings by Priilaid et al. (2020) 

indicated that companies adopting blue ocean strategy often experience higher revenue 

growth and improved market positioning.  

Moreover, Harianto and Lookman (2021) add that blue ocean strategy enhances a 

culture of innovation and creativity, which is essential for sustaining a larger market 

share in today ‘s dynamic business environment. Research by Brege and Kindström 

(2020) also showed that organizations implementing Blue Ocean principles are more 

agile and adaptable, which enhances their ability to respond to market changes and 

technological advancements. Furthermore, findings by Christodoulou, and Langley 

(2020) indicated that firms using blue ocean business frameworks tend to achieve 

higher efficiency and effectiveness in their operations and their strategic focus is on 

creating value for both the company and its customers ensures long-term sustainability 

and profitability.  

Background to the Research Problem  

Freight management is crucial for the facilitation of trade, both regionally and globally. 

Companies operating in this sector face intense rivalry and numerous challenges, 

including regulatory constraints, infrastructural bottlenecks, and fluctuating demand 

(Teece, 2020). According to Githinji (2023), BOS provide a framework for these 

companies to overcome these challenges by exploring new opportunities and creating 

unique value propositions. One way JKIA freight management companies can leverage 

Daystar University Repository

Library Archives Copy



 

4 

 

BOS is by identifying and exploiting new market spaces that have not been fully tapped 

(Githinji, 2023).  

Freight management companies in developed countries, such as Germany, the 

Netherlands, and Sweden, demonstrate high performance levels largely due to 

advanced technological integration and efficient logistical practices. According to the 

World Bank (2022), these countries consistently score above 4.0 out of 5.0 on the 

Logistics Performance Index (LPI), reflecting their robust infrastructure, efficient 

customs procedures, and reliable tracking systems. For example, Germany’s LPI score 

of 4.20 highlights its superior logistics framework, which supports timely and cost-

effective freight movement (World Bank, 2022). Davison (2019) emphasizes that 

technological advancements, including the Internet of Things (IoT) and Artificial 

Intelligence (AI), significantly enhance operational efficiency in these regions. Kiani et 

al. (2022) found that IoT devices enable real-time cargo tracking, while AI optimizes 

route planning and warehouse management, resulting in a 15-20% increase in 

efficiency for German freight companies. 

In North America and Europe, Bartle et al. (2021) report that the global freight 

forwarding market is valued at approximately $189 billion, with significant 

contributions from companies like DHL, FedEx, and UPS. These firms have achieved 

annual revenue growth rates of 5-7% by leveraging economies of scale and providing 

integrated logistics solutions. Additionally, a study by Fulzele and Shankar (2023) on 

European freight transportation revealed that sustainability best practices, such as 

adopting alternative fuel technologies and collaborative logistics solutions, lead to 

environmental benefits and cost savings. Accordingly, practices enhance economic 

efficiency and contribute to the reduction of greenhouse gas emissions, thus aligning 

with broader environmental goals. 

Daystar University Repository

Library Archives Copy



 

5 

 

Rahman et al. (2022) highlight that French firms have achieved steady growth by 

leveraging advanced logistics technologies and differentiating their services. For 

instance, DB Schenker France offers specialized logistics solutions, while Dachser 

France expanded its network, resulting in a 5% increase in freight volume in 2023 

(Bombelli et al.,  2020). Similarly, innovative practices such as digital platforms for 

real-time tracking and eco-friendly solutions, as seen with Kuehne + Nagel France and 

Geodis, contribute to enhanced customer satisfaction and reduced carbon emissions 

(Zhang & Graham, 2020). In India and Jordan, airlines have implemented sustainability 

practices and cost leadership strategies to reduce emissions and attract cost-sensitive 

customers, respectively (Sharma et al.,  2022; Al-Momani & Saleh, 2018). In South 

Korea, CJ-Global Logistics Service achieved significant growth by creating a blue 

ocean market through technological innovations, such as RFID-based systems, which 

set it apart in the industry (Namboodiri et al.,  2019). 

Freight management companies in Africa show a mixed performance landscape, with 

notable disparities between regions and companies. In South Africa, Imperial Logistics 

saw a 6% revenue increase in 2023 due to its extensive network and investment in 

supply chain optimization (Button, 2020). Conversely, East African firms like Bolloré 

Africa Logistics face infrastructure deficits and regulatory hurdles, resulting in only a 

2.09% growth (Tolcha et al.,  2020). However, Kenya ‘s Siginon Group, by integrating 

eco-friendly logistics and specializing in perishable goods, achieved a 4% increase in 

market share.  

In East Africa, the performance of freight management companies has varied 

significantly since 2019. The East African Business Council (2023) reported a 

compound annual growth rate (CAGR) of approximately 4.9% from 2019 to 2023, 

driven by increased trade volumes and infrastructural improvements. Bolloré Logistics, 

Daystar University Repository

Library Archives Copy



 

6 

 

for example, reported an 8% increase in freight volumes in 2022 due to expanded 

operations in Kenya and Uganda (Bolloré, 2023). In contrast, smaller firms like Freight 

Forwarders Kenya and Swift Freight have faced profitability challenges amid rising 

operational costs and limited access to financing, with Freight Forwarders Kenya 

experiencing a 5.8% revenue drop in 2021 (East African Business Council, 2023). 

According to Kidenda (2024), while freight logistics in East Africa is stabilizing, 

technological disruption is pushing companies to innovate and differentiate their 

services. 

In Kenya, studies by Mwangi and Njuguna (2023) and Ochola and Were (2019) found 

that cost-effective strategies, such as optimizing logistics processes and investing in 

automation and digital tracking systems, led to significant operational cost reductions 

and improved customer satisfaction. However, profitability remained a challenge, 

indicating that cost leadership alone might not lead to improved performance. Similarly, 

Ochola and Were (2019) noted that cost management significantly improved the 

performance of air cargo handling projects at Jomo Kenyatta International Airport 

(JKIA). Kuteyi and Winkler (2022) highlighted that rising operational costs, driven by 

fluctuating fuel prices and increased labor expenses, are primary challenges for Kenyan 

logistics companies. These pressures necessitate continuous innovation and investment 

in technology and infrastructure to stay sustainable, particularly in the rapidly growing 

e-commerce sector. Ndonye et al. (2024) also noted that Kenya’s logistic performance 

index is lagging behind other leading African countries including South Africa, Egypt, 

and Tanzania, which impairs trade facilitation. 

Blue Ocean Strategy is closely linked to organizational performance by driving firms 

to pursue innovative pathways that unlock new market opportunities, thereby 

enhancing growth and profitability. The strategy encourages organizations to focus on 

Daystar University Repository

Library Archives Copy



 

7 

 

creating new value for customers through differentiation and innovation, which leads 

to the development of untapped markets and the generation of new demand (Kim & 

Mauborgne, 2020). By prioritizing innovation, companies adopting Blue Ocean 

Strategy often experience significant improvements in operational efficiency, customer 

satisfaction, and overall revenue generation as they offer unique products or services 

that meet emerging customer needs (Yang, 2021). Additionally, the focus on non-

traditional markets allows firms to optimize their resources, reduce costs, and 

streamline processes, leading to better performance outcomes (Meyer & Thu Tran, 

2023). The strategic shift towards value creation also enables companies to achieve 

better alignment between their offerings and customer expectations, driving long-term 

sustainable growth and enhanced organizational performance (Agnihotri, 2022). As 

organizations pursue Blue Ocean initiatives, they often see improved stakeholder 

engagement and brand recognition, further reinforcing their position in the market and 

contributing positively to financial and operational success. 

Blue ocean strategy 

Kim and Mauborgne (2005) define blue ocean strategy as the creation of new market 

spaces that are uncontested, through innovation and value creation. According to 

Johnson et al. (2017) BOS refers to the systematic pursuit of differentiation and low 

cost to open up a new market space and create new demand. Chan and Mauborgne 

(2014) define blue ocean strategy as a strategic move aimed at capturing untapped 

market potential, thus generating high growth and profitability by offering 

unprecedented value to customers. Thompson and Strickland (2019) define blue ocean 

strategy as a business approach that involves breaking free from the traditional 

competitive strategy framework by identifying and targeting underserved market 

segments through innovative offerings. This study adopts the definition provided by 

Daystar University Repository

Library Archives Copy



 

8 

 

Chan and Mauborgne (2014) focusing on capturing untapped market potential, thus 

generating high growth and profitability by offering unprecedented value to customers, 

which aligns with the core objective of exploring new opportunities and fostering 

sustainable growth opportunities in the logistics sector. 

As per Chan et al., (2014), blue ocean strategy comprises of elements such as cost 

leadership, differentiation and value creation. This implies that companies may 

concentrate on generating fundamentally new and superior value for customers, rather 

than simply making incremental improvements to existing products or services. 

According to Fitri (2021), business organizations must systematically eliminate and 

reduce the factors that the industry has traditionally competed on, while simultaneously 

creating and raising new factors of operation that the industry has never offered. This 

strategic logic enables firms to drive down costs and boost differentiation in a mutually 

reinforcing manner, thereby carving out lucrative new market spaces untainted by the 

red ocean of rivalry (Priilaid, et al., 2020). 

As postulated by Sjödin et al. (2020), value creation involves designing and delivering 

products or services that significantly enhance the perceived value for customers. 

According to Freudenreich et al., (2020), this strategy entails focusing on activities that 

provide superior value to customers while differentiating the business. Chandler (2022) 

suggests that businesses adopting value creation emphasize innovation and cost 

efficiency to meet evolving customer needs and drive performance. According to Sjödin 

et al. (2020), such businesses typically exhibit a deep understanding of customer 

preferences, continuous investment in research and development, and a strong 

commitment to quality and service excellence. These companies strategically align their 

operations and offerings to enhance customer satisfaction and loyalty, thereby securing 

a sustainable market position. 

Daystar University Repository

Library Archives Copy



 

9 

 

As explained by Panwar and Khan (2023), differentiation alludes to offering distinct 

features, superior quality, or exceptional service that are valued by customers and 

perceived as unique. Khan, (2023) observes that organizations adopting a 

differentiation focus on research and development, are committed to high-quality 

standards, and exhibit a deep understanding of customer needs. They also invest heavily 

in branding and customer experience to reinforce their unique position in the market 

and build strong brand loyalty (Khan, 2023). 

On the other hand, cost leadership entails becoming the lowest-cost producer or service 

provider in a particular industry, allowing companies to offer lower prices than similar 

firms while maintaining profitability and quality (Suryanto & Anggraini, 2020). 

According to Njuguna and Waithaka (2020), this strategy emphasizes operational 

efficiency, economies of scale, and cost reduction across all business processes. Haque 

(2021) contends that by minimizing operating costs, firms can attract price-sensitive 

customers and gain an edge in the market. Findings by Islami et al. (2020) depicted that 

firms adopting this strategy are characterized by streamlined operations, a focus on 

high-demand niches, and a broad customer base. Kimiti (2020) adds that this approach 

not only enhances market share but also creates barriers to entry, as new entrants may 

struggle to compete with established cost leaders who can sustain lower prices.  

Organizational Culture 

According to Adebayo et al. (2020), organizational culture plays a crucial role in the 

successful execution of strategies. For any strategy to be effectively developed and 

implemented, it must align seamlessly with the organization’s culture. Consequently, it 

is essential to establish initiatives and goals that foster a culture supportive of the 

organization’s strategic direction over time. As noted by Shea et al. (2023), when 

Daystar University Repository

Library Archives Copy



 

10 

 

organizational culture aligns with strategic implementation, it enables efficient 

operation within a dynamic market. 

A cohesive and robust culture is vital for driving strategic innovation and enhancing an 

organization’s performance through effective market positioning and goal alignment 

(Khaskhely & Sethar, 2022). When an organization’s culture prioritizes productivity, it 

can successfully achieve its core mission, which may involve timely product delivery, 

surpassing similar firms in output, or similar objectives. Organizations that cultivate a 

flexible culture are better equipped to embrace change and foster an environment 

conducive to innovation (Hussain & Alghazali, 2020). This approach not only 

encourages cultural diversity but also clarifies the pathway for strategic innovation. 

Particularly in the manufacturing sector, a flexible organizational culture is essential, 

as technological advancements can quickly render existing technologies obsolete, 

necessitating continual adaptation and change (Paais & Pattiruhu, 2020). 

Khaskhely et al. (2022) adds that a culture that encourages innovation empowers 

employees to explore new ideas and approaches, facilitating creative problem-solving 

and the development of novel products or services. Moreover, adaptability is essential 

for organizations to respond effectively to changing market conditions and customer 

needs; a culture that values flexibility enables teams to pivot quickly when necessary 

(Hussain et al.,  2020). 

Organizational performance 

As Goleman (2019) proclaimeth, the performance of an organization is the measure of 

how well enterprises dost fulfill their lofty aims and aspirations. From the vantage of 

Richard et al. (2019), it doth encompass three specific domains: the realm of financial 

accomplishment, the market performance of goods, and the returns bestowed upon 

Daystar University Repository

Library Archives Copy



 

11 

 

shareholders. Adan (2016) affirmeth that it concerneth the execution of business 

processes that artfully and efficiently attain the objectives of the organization. Neely, 

Gregory, and Platts (2020) define organizational performance as the endeavor of 

quantifying the efficacy and effectiveness of business undertakings. Venkatraman and 

Ramanujam (2021) depict it as a mirror reflecting an organization’s triumph in 

achieving both its financial and non-financial aspirations, including financial markers 

such as profitability and the growth of revenue, alongside operational measures like 

market share and the quality of products. Conversely, Daft (2020) describeth 

organizational performance as the capacity of an organization to fulfill its mission 

through judicious governance, sound management, and an unwavering commitment to 

achieving results. This study doth embrace the definition offered by Venkatraman et al. 

(2021), which considereth the success of an organization in fulfilling its financial and 

non-financial pursuits. 

Traditionally, organizational performance has traditionally been measured through 

financial metrics such as profitability, return on investment (ROI), reflecting the 

efficiency and profitability of an organization (Goleman, 2019).  According to Adan 

(2016), financial metrics provide a clear indication of an organization’s economic 

health and its ability to generate wealth for shareholders. However, these measures 

often fail to capture other critical aspects of performance, such as customer satisfaction, 

market share, product/service quality, service delivery and employee engagement (Daft, 

2020).  

Modern measures of organizational performance have evolved to include non-financial 

metrics that provide a more holistic view of an organization’s effectiveness. The 

Balanced Scorecard, developed by Kaplan and Norton (1996), integrates financial and 

non-financial measures across four perspectives: financial, customer, internal business 

Daystar University Repository

Library Archives Copy



 

12 

 

processes, and learning and growth. This approach indicates that organizational 

performance is multi-faceted and cannot be fully understood through financial metrics 

alone. Moreover, contemporary performance measures also consider aspects such as 

sustainability, innovation, and corporate social responsibility (CSR). Neely, Gregory, 

and Platts (2020) argue that modern performance measurement frameworks recognize 

the importance of aligning organizational activities with strategic objectives, thereby 

ensuring long-term success and adaptability in a dynamic business environment. 

From an operational standpoint, Karingithi et al. (2020) notes that freight companies 

‘performance is often evaluated based on metrics such as on-time delivery, shipment 

accuracy, and responsiveness to customer needs. The authors contend that the ability to 

consistently meet or exceed customer expectations in these operational areas is crucial 

for freight companies to maintain and sustain long-term relationships with clients 

(Bozarth & Handfield, 2019). 

The Logistics Performance Index (LPI) serves as a means to gauge the efficacy of 

freight enterprises by evaluating the logistical efficiency of diverse realms (Ndonye et 

al.,  2024). It consisted of six pivotal components: the performance of customs, the 

quality of infrastructure, the ease of arranging shipments, the caliber of logistics 

services, the capabilities of tracking and tracing, and the timeliness of shipments. Every 

nation is assigned a score that spans from 1 to 5, with loftier scores indicating superior 

logistics performance, thus enabling freight companies to measure their operations 

against the standards of the globe. The LPI is grounded in a confluence of qualitative 

insights from logistics operatives and quantitative data, bestowing a comprehensive 

perspective on logistical capabilities (Eyob & Kahsai, 2019). 

Kadłubek et al. (2022) further emphasize the importance of efficiency as a key 

component of organizational performance for freight companies. The authors argue that 

Daystar University Repository

Library Archives Copy



 

13 

 

in the highly dynamic and cost-sensitive transportation industry, the ability to optimize 

operations and streamline business processes is crucial for freight companies to 

maintain profitability. In his opinion Gonzalez-Pascual (2021), freight companies that 

excel in fleet utilization, route optimization, supply chain integration, and the 

automation of administrative tasks are better equipped to reduce operational costs, 

minimize waste, and enhance overall productivity. This, in turn, allows them to offer 

more value added products/ services to clients, while simultaneously improving profit 

margins and strengthening their financial performance. Similarly, Fulzele and Shankar 

(2023) argue that freight companies that fail to prioritize efficiency may struggle to 

maintain a cost-effective operational model, ultimately compromising their ability to 

perform effectively in the market and undermining their overall organizational 

performance.  

In this study, performance was be measured through delivery accuracy, delivery time 

and Fleet Utilization Rate. The indicators provide a comprehensive view of a freight 

company’s performance by measuring both service quality (accuracy and timeliness) 

and operational efficiency (fleet utilization). These metrics are essential for sustaining 

growth, enhancing profitability, and maintaining customer satisfaction in the highly 

dynamic logistics industry. 

Blue ocean strategy and Organizational Performance 

Blue Ocean Strategy, as articulated by Kim and Mauborgne (2005) emphasizes the 

creation of new market spaces, unlike red oceans where businesses vie for dominance 

in saturated markets. This strategic approach argues that organizations can achieve 

superior performance by innovating and differentiating their offerings rather than 

competing directly with rivals (Thompson & Strickland, 2019).  Studies have shown 

that companies implementing blue ocean strategy often experience enhanced 

Daystar University Repository

Library Archives Copy



 

14 

 

profitability and growth, as they focus on value creation that meets unaddressed 

customer needs (Ellinger et al.,  2022; Weerawardena et al. 2021). Furthermore, 

research indicates that organizations adopting this strategy, lead to improved 

organizational performance metrics such as increased market share and customer 

loyalty (Vigar et al.,  2020). Moreover, the implementation of blue ocean strategy 

necessitates a cultural shift within organizations, promoting creativity and collaboration 

among employees (Abdel-Dayem et al. (2021). According to Thompson et al. (2019), 

this shift is crucial for fostering an environment where innovative ideas can flourish, 

ultimately contributing to enhanced organizational performance.  

Scholars suggest that organizations that embrace blue ocean strategy tend to exhibit 

higher levels of employee engagement and satisfaction, as team members are 

encouraged to contribute to the strategic vision (Huang, 2021). Additionally, the 

alignment of organizational resources and capabilities with the principles of Blue Ocean 

Strategy can lead to more effective decision-making processes and resource allocation, 

further amplifying performance outcomes (Zhang & Zhou, 2022). Thus, the interplay 

between blue ocean strategy and organizational performance underscores the 

importance of strategic innovation and organizational culture in achieving long-term 

success. 

Chan et al. (2014) argues that companies that embrace blue ocean strategy are more 

likely to develop a culture of continuous improvement and learning, enabling them to 

respond effectively to changing market conditions. This adaptability is crucial in 

today’s dynamic business environment, where organizations must be agile and 

proactive to maintain their relevance (Benitez et al.,  2020). Moreover, the focus on 

value creation inherent in blue ocean strategy encourages organizations to explore new 

technologies, processes, and business models, which potentially lead to significant 

Daystar University Repository

Library Archives Copy



 

15 

 

breakthroughs and enhanced performance (Huang, 2021). Through continuously 

seeking out new opportunities and challenging the status quo, organizations 

implementing blue ocean strategy can stay ahead in their respective industries and 

achieve superior financial and operational results (Nasereddin, 2023). 

Freight management companies in Kenya 

The Jomo Kenyatta International Airport (JKIA) serves as a strategic hub for air cargo, 

handling over 200,000 tons of freight annually, according to the Kenya Airports 

Authority (2023). The increasing demand for air freight services, driven by the growth 

of e-commerce and global trade, has led to an influx of logistics companies seeking to 

capitalize on this burgeoning market. Major players in the sector, such as Kenya 

Airways Cargo and Swissport, dominate the landscape due to their extensive networks 

and established reputations. The opertional landscape at JKIA is characterized by a mix 

of large international logistics providers and local firms. Kenya Airways Cargo, as the 

leading airline cargo service, has reported over 10% increase in freight volumes year-

on-year since 2021, attributed to the expansion of its cargo routes and capacity (Kenya 

Airways, 2023). 

According to a 2022 report by the International Air Transport Association (IATA), the 

global freight sector experienced a 5% decrease in profit margins, attributed to market 

saturation (IATA, 2022). This operational landscape at JKIA mirrors global trends, 

where companies struggle to differentiate themselves amidst a crowded marketplace. 

Additionally, high operational costs, including fuel, maintenance, and labor, further 

strain profitability. A study by Gachui (2022) found that freight logistics companies in 

Kenya face operating costs that are 15% higher than the global average, partly due to 

infrastructural inefficiencies and fluctuating fuel prices. Similarly, asurvey by the 

Kenya Airports Authority (KAA) in 2023 revealed that 30% of freight delays at JKIA 

Daystar University Repository

Library Archives Copy



 

16 

 

are attributed to outdated cargo handling equipment and inadequate facilities (KAA, 

2023). 

Furthermore, a study by Odago et al.,  (2023) depicted that approximately 47% of the 

cargo companies in JKIA struggle with limited resources and access to capital, 

hindering their ability to grow exponentially. Dere (2023) reported that some freight 

companies like Linton Freight and AtoZ Logistics have experienced stagnation in 

growth, with reported revenue remaining flat since 2021 due to rising operational costs 

and pressures from larger entities (Dere, 2023). This disparity in performance 

underscores the need for niche strategies among the freight companies, to sustain their 

operations. Ndonye et al. (2024) also noted that the industry faces several challenges, 

including internal leadership disputes at the national level, a damaged public image, 

and issues with service delivery delays and unpredictability.  These issues have resulted 

in inefficiencies, as seen in declining Logistics Performance Index (LPI) scores and 

concerns about service quality. 

Statement of the Problem  

The freight management companies at Jomo Kenyatta International Airport (JKIA) in 

Nairobi, Kenya are facing significant performance challenges caused by market 

saturation and increasing operation cost (Gachui, 2022; IATA, 2023, Dere, 2023). 

Industry data shows that cargo volumes at JKIA have stagnated in recent years, growing 

by only 1.5% in 2021 compared to the pre-pandemic level in 2019 (Kenya Airports 

Authority, 2023).  Furthermore, profit margins for many freight forwarders and cargo 

handling companies operating at JKIA are under pressure, with some reporting declines 

of 10-15% over the past 3 years (Harriet & Omwenga, 2024).  This poor performance 

is a major problem for the Kenyan economy, as JKIA is the country ‘s primary air cargo 

hub, handling over 300,000 tons of freight annually and accounting for 60% of Kenya 

Daystar University Repository

Library Archives Copy



 

17 

 

‘s total air cargo traffic.  The stagnation and declining profitability of JKIA’s freight 

management companies threaten the airport’s performance, jeopardizes its role as a 

regional logistics center, and limits its ability to drive economic growth through trade 

and investment (Ochola & Were, 2019). 

If the performance issues at JKIA ‘s freight management companies are not addressed, 

it could lead to a further erosion of Kenya ‘s position as a preferred air cargo destination, 

reduced investment in logistics infrastructure, and missed opportunities for businesses 

and consumers to access global markets efficiently. This would have far-reaching 

negative consequences for the Kenyan economy, which relies heavily on the country ‘s 

status as an East African trade and logistics hub. Identifying innovative strategies to 

boost the performance of JKIA ‘s freight management companies is therefore a critical 

priority. 

In relation to this research, various studies have been conducted but depicting several 

research gaps. For instance, in a study aimed at investigating the impact of sustainability 

best practices on European freight transportation performance, Fulzele and Shankar 

(2023) sought to identify strategies that freight companies could employ to enhance 

their environmental, social, and economic performance. However, the study did not 

show how these strategies contributed to organizational performance. Study by 

Bombelli et al.,  (2020) showed that in Europe, Air freight companies have adopted 

innovative practices to attract and retain customers. However, the study did not show 

the extent to which the innovative practices have influenced customer retention. 

Ndonye et al.  (2024) focused on the relationship between tactical influence and 

organizational effectiveness of freight forwarding firms in Nairobi city county, Kenya 

found a positive relationship between tactical influence and organizational 

effectiveness. However, the study focused on organizational effectiveness which differs 

Daystar University Repository

Library Archives Copy



 

18 

 

from performance. The current study aims to bridge the research gaps by establishing 

the effect of blue ocean strategy on performance of JKIA freight Management 

Companies in Kenya. 

Purpose of the Study 

The purpose of the study was to investigate the effect of blue ocean strategy on 

performance of JKIA freight Management Companies in Kenya. 

Objectives of the Study 

i. To assess the extent of adoption of blue ocean strategy by JKIA freight 

Management Companies in Kenya. 

ii. To evaluate the organizational performance of JKIA freight Management 

Companies in Kenya. 

iii. To determine the effect of blue ocean strategy on organizational performance of 

JKIA freight Management Companies in Kenya. 

iv. To find out the moderating effect of organizational culture on the relationship 

between blue ocean strategy and organizational performance of JKIA freight 

Management Companies in Kenya. 

Research Questions  

i. To what extent have JKIA freight Management Companies in Kenya adopted 

blue ocean strategy?  

ii. How is the organizational performance implemented by JKIA freight 

Management Companies in Kenya? 

iii. What is the effect of blue ocean strategy on organizational performance of JKIA 

freight Management Companies in Kenya? 

Daystar University Repository

Library Archives Copy



 

19 

 

iv. Does organizational culture moderate the relationship between blue ocean 

strategy and organizational performance of JKIA freight Management 

Companies in Kenya? 

Significance of the Study 

This research is beneficial to various parties.  For the businesses that handle freights, 

the results provided strategic insights that help these companies innovate and 

differentiate themselves from similar firms by creating uncontested market spaces. This 

could involve developing new services, optimizing logistics processes, or leveraging 

on technology to enhance efficiency and customer satisfaction. Second, the research 

findings inform the companies on how to reduce operational costs while increasing 

value for customers, thereby improving profitability and long-term sustainability. To 

the policymakers in the Ministry of Transport and Infrastructure, the study equips them 

with empirical evidence and strategic insights necessary to formulate policies that 

encourage innovation and efficiency within the freight management and air travel 

sectors. The policymakers can develop supportive regulatory frameworks and 

incentives that promote the adoption of innovative practices, ultimately leading to 

enhanced performance and economic growth. The study also benefits future researchers 

and scholars as it provides additional literature on the relationship between blue ocean 

strategy and organizational performance.  Business practitioners also benefit from 

insights on the blue ocean strategy that they can adopt to enhance their businesses.  

Justification of the Study 

The justification for this study lies in the evolving market dynamics within the freight 

management sector in Kenya, particularly at Jomo Kenyatta International Airport 

(JKIA). Through investigating the adoption of blue ocean strategy—a framework that 

Daystar University Repository

Library Archives Copy



 

20 

 

encourages companies to pursue innovation and create uncontested market spaces—

this research aimed to provide valuable insights into how such strategies can enhance 

organizational performance. Understanding the relationship between blue ocean 

strategies and performance metrics not only benefit freight management companies in 

refining their operational approaches but also contribute to the broader discourse on 

strategic management in emerging markets. Ultimately, the findings could guide 

industry stakeholders in adopting innovative practices that foster sustainable growth in 

a challenging environment. 

Assumptions of the Study  

The study assumed that the freight management companies at JKIA were aware of and 

had implemented blue ocean strategy. Second, it presupposed that there were 

measurable performance indicators that could accurately reflect the impact of these 

strategies, such as delivery accuracy, delivery timeliness, fleet utilization market share, 

customer satisfaction, and operational efficiency. Third, the study assumed that external 

factors, such as economic conditions and regulatory changes, had a consistent influence 

across all companies involved, thus not skewing the comparison. Lastly, it assumed that 

blue ocean strategy was distinct and identifiable within the companies ‘strategic 

frameworks, allowing for clear differentiation between traditional and innovative 

practices. The above assumptions were looked into when collecting data.  

Scope of the Study 

The study was conducted in the last week of September and the first week of October, 

during which primary data was collected from top and middle-level employees at JKIA 

freight management companies. The findings were analyzed shortly thereafter, 

contributing to the understanding of how Blue Ocean Strategy impacts organizational 

Daystar University Repository

Library Archives Copy



 

21 

 

performance in this sector. The study focused on blue ocean strategy as the independent 

variable and organizational performance as the dependent variable. The specific 

independent variables were differentiation, value creation and cost leadership. The 

study’s area of focused on 40 JKIA freight Management Companies in Kenya. The 

study relied on primary data which was collected using semi structured questionnaires. 

The unit of observation in the study were the top level and middle level employees in 

the JKIA freight Management Companies. The unit of analysis were the JKIA freight 

Management Companies.  

Limitations and Delimitations of the Study 

Respondents were hesitant to participate or may have provided inaccurate information 

due to concerns that the study was investigative rather than academic. To mitigate this, 

the researcher secured authorization from Daystar University and NACOSTI and 

emphasized to participants that the study was for academic purposes only. Additionally, 

due to tight work schedules, participants could have limited time to complete the 

questionnaires. To address this, the researcher employed a "drop and pick later" 

approach for the questionnaires and request participants’ contact information for 

follow-up.  

Moreover, since the research was conducted at the researcher’s workplace, this could 

challenge objectivity and lead to biased responses. To mitigate this, independent 

research assistants were used to collect data, reducing the researcher’s direct 

involvement. Furthermore, the study only focused on freight companies at JKIA, 

limiting the scope and potentially affecting generalizability to other sectors or locations. 

However, probabilistic sampling techniques was employed to ensure that the findings 

can be generalized to other freight companies in Kenya. Another limitation was the 

study’s restriction to top-level and middle-level managers in JKIA freight companies, 

Daystar University Repository

Library Archives Copy



 

22 

 

which may limit the comprehensiveness of the data. To counter this, the researcher 

ensured a large and diverse sample size to capture more representative data across these 

management levels. 

Operational Definition of Terms 

Blue Ocean 

Strategy:  

Refers to the creation of new market spaces that are uncontested 

through innovation and value creation (Chan & Mauborgne, 2014). 

In this study, is the strategic move of freight management 

companies aimed at capturing untapped market potential, thus 

generating high growth and profitability by offering unprecedented 

value to customers. 

Cost 

Leadership: 

Refers to a business strategy focused providing goods or services at 

the lowest cost possible, but maintaining service quality and 

efficiency (Suryanto & Anggraini, 2020). In this study, it is the 

strategy of providing desirable freight services at the lowest cost 

possible by eliminating some cost areas. 

Differentiation

: 

This refers to offering distinct features, superior quality, or 

exceptional service that are valued by customers and perceived as 

unique (Panwar & Khan, 2023).  In this study, it is the development 

of services that are convenient and personalized by the freight 

companies. 

Value 

creation: 

A business approach aimed to create new market opportunities by 

offering distinctive value to customers while minimizing costs. 

(Ellinger et al., 2022). In this study it is the development of unique 

logistics solutions and services that offer exceptional value to 

customers while simultaneously reducing operational costs, thus 

creating new market opportunities for freight management 

companies in JKIA. 

Daystar University Repository

Library Archives Copy



 

23 

 

Freight 

Management 

Companies: 

These are businesses that specialize in the planning, coordination, 

and execution of the movement of goods and cargo (KAA, 2023). 

In this study they are firms that are involved in the planning, 

coordination, and execution of the movement of goods and cargo 

by air. 

Organizational 

Performance: 

Refers to how well an organization is doing and how much of its 

daily tasks and objectives it successfully completes 

(Goleman,2019).  In this study, it refers to the effectiveness and 

efficiency with which freight companies achieve their goals and 

objectives, encompassing aspects such as operational efficiency, 

customer satisfaction, financial profitability and market share.  

  

Chapter Summary 

Chapter one contained the background to this study. The context of the study was 

discussed in global, regional and local perspective.  The study variables were 

conceptualized and the statement of the problem provided together with the objectives 

of the research. The benefits of the study, justification and assumptions were also given. 

The limitations and delimitations were also shown together with terms definitions.  

 

 

 

 

 

Daystar University Repository

Library Archives Copy



 

24 

 

CHAPTER TWO  

LITERATURE REVIEW  

Introduction  

This chapter reviews the pertinent writings with the aim of acquiring wisdom regarding 

the elements of success inherent in blue ocean strategy, which yield exceptional 

organizational performance. It encompassed the theories that pertain to the study, 

general literature, empirical texts, and the conceptual framework. 

Theoretical Framework 

Theoretical frameworks serve as the bedrock for understanding scientific phenomena. 

They facilitate contemplation, prediction, and clarification of various occurrences 

(Cooper & Schindler, 2013). By adhering to key bounding assumptions, these theories 

not only challenge established knowledge but also enrich it. Fundamentally, they play 

a crucial role in identifying and articulating research dilemmas (Cooper & Schindler, 

2013). This section investigates the theories articulated in the literature to illustrate the 

connection between blue ocean strategy and the performance of enterprises. The 

research was informed by the Resource-Based View and the theory of dynamic 

capabilities.  

Dynamic Capabilities Theory 

The Dynamic Capabilities Theory, introduced by Teece et al. (1997), was crafted to 

meet the imperative for firms to adapt and reorganize their resources in swiftly evolving 

environments. This theory underscores the significance of a firm’s capacity to integrate, 

develop, and reconfigure both internal and external competencies in response to these 

rapid changes. As asserted by Teece et al. (1997), dynamic capabilities empower firms 

to attain novel forms of operational advantage by discerning opportunities and threats, 

Daystar University Repository

Library Archives Copy



 

25 

 

and by seizing these opportunities through the enhancement, combination, protection, 

and reconfiguration of the firm’s tangible and intangible assets. This theory accentuates 

that mere possession of valuable resources is insufficient; rather, the ability to 

effectively transform deploy these resources in response to environmental changes is 

crucial.  

Sensing capabilities are crucial for identifying blue ocean opportunities and detecting 

shifts in customer needs, technological advancements, and market dynamics that could 

inform novel value propositions (Teece et al., 1997; Bleady, 2018). These capabilities 

help firms recognize potential blue oceans, understand factors driving value creation, 

and identify limitations in current value offerings (Bleady, 2018; Kuuluvainen, 2012). 

Day and Schoemaker (2016) emphasize the importance of sensing capabilities in 

detecting market signals that could lead to breakthrough value creations. Seizing 

capabilities involve mobilizing resources to address market opportunities, capture 

value, and are essential for translating identified blue ocean opportunities into concrete 

strategies and actions (Teece et al., 1997; Gremme & Wohlgemuth, 2017). 

Organizations with strong seizing capabilities can overcome organizational inertia, 

commit resources to pursue potentially disruptive value creations, and more effectively 

implement BOS by rapidly developing new products, services, or business models that 

create a leap in customer value (Teece, 2007; Helfat & Raubitschek, 2018). 

As advanced by Wheeler (2012) transforming capabilities (continuous renewal and 

reconfiguration of organizational assets and structures) are crucial for sustaining and 

evolving value creation strategies over time. These capabilities enable firms to adapt 

their value creation approaches as market conditions change and similar firms attempt 

to imitate their strategies. It is argued that organizations with strong transforming 

capabilities are able to effectively protect their existing blue oceans and create new ones 

Daystar University Repository

Library Archives Copy



 

26 

 

as existing market spaces become crowded (Gupta et al., 2020). Moreover, 

transforming capabilities help firms balance exploration and exploitation activities, 

ensuring a continuous pipeline of value creations (Hunt & Madhavaram, 2020).  

Sensing capabilities are crucial for identifying blue ocean opportunities and detecting 

shifts in customer needs, technological advancements, and market dynamics that could 

inform novel value propositions (Teece et al., 1997; Bleady, 2018). These capabilities 

help firms recognize potential blue oceans, understand factors driving value creation, 

and identify limitations in current value offerings (Bleady, 2018; Kuuluvainen, 2012). 

Day and Schoemaker (2016) emphasize the importance of sensing capabilities in 

detecting market signals that could lead to breakthrough value creations. Seizing 

capabilities involve mobilizing resources to address market opportunities, capture 

value, and are essential for translating identified blue ocean opportunities into concrete 

strategies and actions (Teece et al., 1997; Gremme & Wohlgemuth, 2017). 

Organizations with strong seizing capabilities can overcome organizational inertia, 

commit resources to pursue potentially disruptive value creations, and more effectively 

implement BOS by rapidly developing new products, services, or business models that 

create a leap in customer value (Teece, 2007; Helfat & Raubitschek, 2018). 

As advanced by Wheeler (2012) transforming capabilities (continuous renewal and 

reconfiguration of organizational assets and structures) are crucial for sustaining and 

evolving value creation strategies over time. These capabilities enable firms to adapt 

their value creation approaches as market conditions change and similar firms attempt 

to imitate their strategies. It is argued that organizations with strong transforming 

capabilities are able to effectively protect their existing blue oceans and create new ones 

as existing market spaces become crowded (Gupta et al., 2020). Moreover, 

Daystar University Repository

Library Archives Copy



 

27 

 

transforming capabilities help firms balance exploration and exploitation activities, 

ensuring a continuous pipeline of value creations (Hunt & Madhavaram, 2020).  

Sensing capabilities are crucial for identifying blue ocean opportunities and detecting 

shifts in customer needs, technological advancements, and market dynamics that could 

inform novel value propositions (Teece et al.,  1997; Bleady, 2018). These capabilities 

help firms recognize potential blue oceans, understand factors driving value creation, 

and identify limitations in current value offerings (Bleady, 2018; Kuuluvainen, 2012). 

Day and Schoemaker (2016) emphasize the importance of sensing capabilities in 

detecting market signals that could lead to breakthrough value creations. Seizing 

capabilities involve mobilizing resources to address market opportunities, capture 

value, and are essential for translating identified blue ocean opportunities into concrete 

strategies and actions (Teece et al.,  1997; Gremme & Wohlgemuth, 2017). 

Organizations with strong seizing capabilities can overcome organizational inertia, 

commit resources to pursue potentially disruptive value creations, and more effectively 

implement BOS by rapidly developing new products, services, or business models that 

create a leap in customer value (Teece, 2007; Helfat and Raubitschek, 2018). 

As advanced by Wheeler (2012) transforming capabilities (continuous renewal and 

reconfiguration of organizational assets and structures) are crucial for sustaining and 

evolving value creation strategies over time. These capabilities enable firms to adapt 

their value creation approaches as market conditions change and similar firms attempt 

to imitate their strategies. It is argued that organizations with strong transforming 

capabilities are able to effectively protect their existing blue oceans and create new ones 

as existing market spaces become crowded (Gupta et al., 2020). Moreover, 

transforming capabilities help firms balance exploration and exploitation  

Daystar University Repository

Library Archives Copy



 

28 

 

Sensing capabilities are crucial for identifying blue ocean opportunities and detecting 

shifts in customer needs, technological advancements, and market dynamics that could 

inform novel value propositions (Teece et al., 1997; Bleady, 2018). These capabilities 

help firms recognize potential blue oceans, understand factors driving value creation, 

and identify limitations in current value offerings (Bleady, 2018; Kuuluvainen, 2012). 

Day and Schoemaker (2016) emphasize the importance of sensing capabilities in 

detecting market signals that could lead to breakthrough value creations. Seizing 

capabilities involve mobilizing resources to address market opportunities, capture 

value, and are essential for translating identified blue ocean opportunities into concrete 

strategies and actions (Teece et al., 1997; Gremme & Wohlgemuth, 2017). 

Organizations with strong seizing capabilities can overcome organizational inertia, 

commit resources to pursue potentially disruptive value creations, and more effectively 

implement BOS by rapidly developing new products, services, or business models that 

create a leap in customer value (Teece, 2007; Helfat and Raubitschek, 2018). 

As advanced by Wheeler (2012) transforming capabilities (continuous renewal and 

reconfiguration of organizational assets and structures) are crucial for sustaining and 

evolving value creation strategies over time. These capabilities enable firms to adapt 

their value creation approaches as market conditions change and similar firms attempt 

to imitate their strategies. It is argued that organizations with strong transforming 

capabilities are able to effectively protect their existing blue oceans and create new ones 

as existing market spaces become crowded (Gupta et al., 2020). Moreover, 

transforming capabilities help firms balance exploration and exploitation activities, 

ensuring a continuous pipeline of value creations (Hunt & Madhavaram, 2020).  

The dynamic capabilities theory has been used to examine how organizations can be 

sustainable by developing strategic foresight and agility in the face of rivalry, 

Daystar University Repository

Library Archives Copy



 

29 

 

highlighting the importance of sensing, seizing, and transforming capabilities in 

dynamic environments (Schoemaker et al., 2019). Valere (2020) employed the theory 

to analyze the role of dynamic capabilities in fostering innovation ecosystems, 

demonstrating how firms can orchestrate multi-company systems to create and capture 

value.  

According to Barreto (2019), the theory is criticized that the abstract nature of dynamic 

capabilities makes them difficult to quantify and assess empirically. However, the 

theory provides a robust framework for understanding how firms can sustain 

performance in rapidly changing environments. In this study, the theory provided a 

basis for analyzing how freight management companies develop and deploy capabilities 

to create and exploit new market spaces, aligning with the Blue Ocean Strategy ‘s 

emphasis on creating uncontested markets. The theory ‘s focus on sensing and seizing 

opportunities guides the determination of how freight management companies identify 

and capitalize on new business models or service offerings. Additionally, it was helpful 

in exploring how these companies reconfigure their resources and capabilities to adapt 

to the unique challenges and opportunities presented by the Kenyan logistics industry 

to enhance performance.  It informs the study variables which are value creation, cost 

leadership and differentiation.  

Daystar University Repository

Library Archives Copy



 

30 

 

 

Resource-Based View Theory 

The Resource-Based View (RBV) was primarily developed by Barney in (1991), although its 

roots are traced back to the earlier works of Edith Penrose (1959) and further elaborated by 

Margaret Peteraf (1993). This theory emphasizes the significance of internal resources and 

capabilities in achieving and sustaining competitive advantage. The RBV denotes that firms 

gain and maintain a competitive advantage through resources that are valuable, rare, inimitable, 

and non-substitutable. According to Barney (1991), these resources must meet these criteria to 

provide superior performance over competitors in the same industry and their adaptability is 

crucial for sustaining the performance over time. Importantly, the RBV highlights that firms 

must strategically manage and leverage their internal resources to achieve differentiation, 

create new demand, and pursue cost leadership effectively (Madhani, 2010).  

The Resource-Based View (RBV) emphasizes the importance of rare, valuable, inimitable, and 

non-substitutable resources in achieving competitive advantage. Rare resources are not widely 

possessed by competitors and can provide a significant competitive advantage when leveraged 

effectively, enabling organizations to differentiate themselves and innovate in ways that meet 

unaddressed customer needs. Valuable resources allow firms to exploit opportunities and 

neutralize threats, contributing to superior performance through activities that create customer 

value and differentiate the firm. Inimitable resources are unique assets that are difficult for 

competitors to replicate, providing a sustainable competitive advantage by enabling firms to 

develop unique value propositions and carve out uncontested market spaces. Non-substitutable 

resources cannot be easily replaced or replicated without a significant loss in value or 

effectiveness, creating barriers to entry for competitors and securing the firm‘s competitive 

advantage over time, which facilitates continuous innovation and effective response to market 

changes. 

Daystar University Repository

Library Archives Copy



 

31 

 

Figure 1: Theoretical Framework 

 

 

 

 

 

 

 

 

 

Source: Author (2024) 

General Literature  

General literature doth refer to the vast collection of written works that are esteemed 

for their enduring worth and profound significance within a particular realm of 

scholarly inquiry (Kraus et al.,  2022). The intention behind the diligent review of 

general literature is to unearth and illuminate gaps in existing knowledge, to build upon 

the foundational theories already established, and to cultivate new insights and 

perspectives that may enrich the discourse (Paul & Criado, 2020). This section doth 

encompass a thorough exploration of the blue ocean strategy, delving into its intricate 

and multifaceted elements as scrutinized within the study. These elements include the 

principles of value creation, cost leadership, and differentiation, each of which plays a 

pivotal role in shaping competitive advantage. By examining these aspects, the study 

aims to contribute to a deeper understanding of strategic frameworks and their 

Performance 

Resource Based View 

Blue ocean strategy  

Dynamic Capabilities theory 

Daystar University Repository

Library Archives Copy



 

32 

 

applicability in contemporary business contexts, thereby fostering a more nuanced 

appreciation of how firms may navigate uncharted waters within the marketplace. 

Additionally, the section covers organizational performance as the dependent variable 

and associated metrics namely profitability, customer satisfaction and market share. It 

also captures organizational culture as the moderating variable in the study. 

Blue Ocean Strategy 

Kim and Mauborgne (2005) define blue ocean strategy as the creation of new market 

spaces that are uncontested through innovation and value creation. According to 

Johnson et al. (2017), BOS refers to the systematic pursuit of differentiation and low 

cost to open up a new market space and create new demand. Chan and Mauborgne 

(2014) define blue ocean strategy as a tactical move aimed at capturing untapped market 

potential, thus generating high growth and profitability by offering unprecedented value 

to customers. Thompson and Strickland (2019) define blue ocean strategy as a business 

approach that involves breaking free from the traditional competitive strategy 

framework by identifying and targeting underserved market segments through 

innovative offerings. This study adopts the definition provided by Chan and Mauborgne 

(2014), focusing on capturing untapped market potential, thus generating high growth 

and profitability by offering unprecedented value to customers, which aligns with the 

core objective of exploring new opportunities and fostering sustainable performance in 

the logistics sector. As per Chan et al. (2014), blue ocean strategy comprises elements 

such as value creation, cost leadership, differentiation and market creation. The 

foundation of blue ocean strategy rests on the central tenet of value creation (Ellinger 

et al.,  2022). This implies that companies may concentrate on generating 

fundamentally new and superior value for customers, rather than simply making 

incremental improvements to existing products or services. 

Daystar University Repository

Library Archives Copy



 

33 

 

 

 

Cost leadership 

Cost leadership is an approach wherein a company aims to become the lowest-cost 

producer or service provider its industry (Kharub et al.,  2019). This strategy is 

underpinned by the principle of achieving economies of scale, optimizing operational 

efficiencies, and reducing production or service costs (Restiana,2022). According to 

Islami et al. (2020), cost leadership involves a relentless focus on cost reduction across 

all aspects of operations, from procurement and production to distribution and 

marketing. Companies adopting this strategy typically leverage advanced technologies, 

streamlined processes, and rigorous cost control measures to minimize expenses 

(Kharub et al.,  2019). The goal is to offer products or services at a lower price, thereby 

attracting a broad customer base and capturing a significant market share (Bayraktar et 

al., 2017). Cost leadership enables firms to maintain profitability even when market 

prices are driven down (Sun & Li, 2022). 

In service firms, cost leadership is achieved through various strategic initiatives aimed 

at enhancing operational efficiency and reducing service delivery costs. Service firms 

may implement standardized procedures and automated systems to streamline 

operations, reduce human error, and enhance productivity (Ersarı & Naktiyok, 2022). 

For instance, the adoption of advanced information technologies and process 

automation can significantly lower labor costs and improve service speed (Heskett, 

Sasser, & Schlesinger, 2018). Enhancing cost leadership allows firms to improve profit 

margins, and achieve superior performance in cost-sensitive industries (Harric, 2020). 

This strategic focus not only aids in maintaining a strong market position but also 

Daystar University Repository

Library Archives Copy



 

34 

 

supports long-term profitability by ensuring cost-efficiency remains a core component 

of the firm’s operational strategy (Ersarı et al.,  2022). 

Differentiation 

Differentiation is when a firm seeks to distinguish its products or services from those 

of other firms in the industry by emphasizing unique attributes that are valued by 

customers (Mutuku et al., 2024). It is perceived through superior service/product 

quality, innovative designs, brand image, advanced technology and exceptional 

customer service. According to Hermawan et al. (2024), the essence of differentiation 

lies in creating something perceived as unique industry-wide, leading to customer 

loyalty and reduced-price sensitivity. As noted by Angkarini et al.,  (2024), 

differentiation is not merely about offering something different but ensuring that the 

differences are significant and valuable to the target market. This strategy, according to 

Apriani et al. (2024) often calls for substantial investment in research and development, 

marketing, and customer service to create and sustain the perceived uniqueness. 

When a firm’s products or services are perceived as unique, customers are less likely to 

switch to other suppliers, thus nurturing customer loyalty and long-term profitability 

(Yunus & Sijabat, 2021). Moreover, differentiation creates entry barriers for potential 

entrants, as new firms may find it challenging to replicate the unique attributes that 

established firms offer (Alam & Islam, 2017).  It also mitigates the impact of price wars, 

as customers are willing to pay a premium for products or services that better meet their 

needs or provide greater value (Semuel & Octavia, 2018).   

Differentiation is when a firm seeks to distinguish its products or services from those 

of other firms in the industry by emphasizing unique attributes that are valued by 

customers (Mutuku et al., 2024). It is perceived through superior service/product 

Daystar University Repository

Library Archives Copy



 

35 

 

quality, innovative designs, brand image, advanced technology and exceptional 

customer service. According to Hermawan et al. (2024), the essence of differentiation 

lies in creating something perceived as unique industry-wide, leading to customer 

loyalty and reduced-price sensitivity. As noted by Angkarini et al.,  (2024), 

differentiation is not merely about offering something different but ensuring that the 

differences are significant and valuable to the target market. This strategy, according to 

Apriani et al. (2024) often calls for substantial investment in research and development, 

marketing, and customer service to create and sustain the perceived uniqueness 

Differentiation is when a firm seeks to distinguish its products or services from those 

of other firms in the industry by emphasizing unique attributes that are valued by 

customers (Mutuku et al., 2024). It is perceived through superior service/product 

quality, innovative designs, brand image, advanced technology and exceptional 

customer service. According to Hermawan et al. (2024), the essence of differentiation 

lies in creating something perceived as unique industry-wide, leading to customer 

loyalty and reduced-price sensitivity. As noted by Angkarini et al.,  (2024), 

differentiation is not merely about offering something different but ensuring that the 

differences are significant and valuable to the target market. This strategy, according to 

Apriani et al. (2024) often calls for substantial investment in research and development, 

marketing, and customer service to create and sustain the perceived uniqueness 

Differentiation is when a firm seeks to distinguish its products or services from those 

of other firms in the industry by emphasizing unique attributes that are valued by 

customers (Mutuku et al., 2024). It is perceived through superior service/product 

quality, innovative designs, brand image, advanced technology and exceptional 

customer service. According to Hermawan et al. (2024), the essence of differentiation 

lies in creating something perceived as unique industry-wide, leading to customer 

Daystar University Repository

Library Archives Copy



 

36 

 

loyalty and reduced-price sensitivity. As noted by Angkarini et al.,  (2024), 

differentiation is not merely about offering something different but ensuring that the 

differences are significant and valuable to the target market. This strategy, according to 

Apriani et al. (2024) often calls for substantial investment in research and development, 

marketing, and customer service to create and sustain the perceived uniqueness 

Furthermore, by continuously innovating and tailoring offerings to evolving market 

demands, firms adapt to changes more effectively and sustain their market relevance 

over time (Mutuku et al., 2024). According to Audu et al. (2014), service firms 

emphasize exceptional service quality, where they ensure a high level of expertise, 

reliability, and responsiveness in their offerings. They also differentiate through 

personalization of services and innovative service delivery methods to streamline 

processes or offer unique interactions (Apriani et al. 2024).  

Value creation 

Sjödin et al. (2020) assert that a value creation is centered on crafting and delivering 

products or services that significantly boost the perceived value for customers. 

Freudenreich et al. (2020) add that this strategy involves prioritizing activities that offer 

superior value to customers while simultaneously distinguishing the business from 

other firms in the industry. Chandler (2022) highlights that businesses implementing a 

value creation focus on innovation and cost efficiency to address evolving customer 

needs and maintain organizational performance. According to Sjödin et al. (2020), these 

businesses typically demonstrate a profound understanding of customer preferences, 

invest continuously in research and development, and are strongly committed to quality 

and service excellence.  

Daystar University Repository

Library Archives Copy



 

37 

 

Businesses that effectively implement a value creation place a strong emphasis on 

deeply understanding their customers’ evolving preferences and needs (Apriani et al. 

2024). This insight allows them to tailor their products and services to meet or exceed 

customer expectations, thereby enhancing perceived value (Awladthani et al. 2023). 

Continuous investment in research and development (R&D) is a critical component of 

this approach, as it enables businesses to innovate and adapt quickly to market changes, 

ensuring their offerings remain relevant. Furthermore, a steadfast commitment to 

quality and service excellence helps build customer trust and loyalty, creating long-term 

relationships that are beneficial for both the business and its customers (Mutuku et al., 

2024). This comprehensive approach not only meets immediate customer demands but 

also anticipates future needs, positioning the business as a leader in its industry and 

fostering sustained organizational performance (Chandler, 2022). 

Organizational Performance 

Goleman (2019) defines organizational performance as the degree to which firms 

achieve their goals and objectives. Richard et al. (2019) further explain that it 

encompasses three key areas: financial performance, product market performance, and 

shareholder return. Adan (2016) emphasizes that organizational performance is the 

execution of business processes in a manner that effectively and efficiently meets 

organizational goals. Neely et al.,  (2020) describe it as the process of measuring the 

efficiency and effectiveness of business actions. According to Venkatraman and 

Ramanujam (2021), organizational performance reflects an organization’s success in 

achieving both financial and non-financial objectives, including indicators such as 

profitability, revenue growth, market share, and product quality. Daft (2020) adds that 

organizational performance is the ability of an organization to fulfill its mission through 

Daystar University Repository

Library Archives Copy



 

38 

 

effective management, strong governance, and a continuous commitment to achieving 

results.  

According to Barauskaite and Streimikiene (2021), key performance indicators (KPIs) 

in the freight handling sector include Logistics performance index (on-time delivery 

rates, cargo damage rates, and inventory accuracy), which indicate the reliability and 

effectiveness of logistics operations (Lee et al.,  2022). Additionally, metrics such as 

cost per shipment and throughput time provide insights into the financial efficiency of 

freight handling processes. According to studies, these indicators not only reflect the 

operational capabilities of freight companies but also influence customer satisfaction 

and retention, ultimately impacting the company’s performance in the market (Al Aina 

& Atan, 2020). This study adopts Karingithi et al. (2020) definition of organizational 

performance that freight companies ‘performance is often evaluated based on metrics 

such as on-time delivery, shipment accuracy, and responsiveness to customer needs. 

Delivery Accuracy 

Delivery accuracy refers to the ability to deliver goods to the correct destination at the 

agreed time, meeting both the sender’s and recipient’s expectations. It is a critical 

freight performance indicator that measures how well a freight company adheres to 

delivery schedules and ensures the accuracy of shipments in terms of timing, quantity, 

and condition (Bowersox et al.,  2013). In freight operations, high delivery accuracy is 

essential as it minimizes delays, reduces customer dissatisfaction, and enhances overall 

supply chain efficiency. Freight companies use delivery accuracy to assess their service 

reliability, track operational performance, and identify areas needing improvement. 

Accurate deliveries also help to avoid additional costs associated with re-shipments, 

penalties, and inventory management disruptions (Rushton et al.,  2017). Furthermore, 

delivery accuracy serves as a key metric for customer satisfaction, with frequent on-

Daystar University Repository

Library Archives Copy



 

39 

 

time and precise deliveries leading to stronger customer relationships and improved 

market dominance (Grant et al, 2017). Therefore, in performance evaluations, freight 

companies leverage delivery accuracy to gain insights into the effectiveness of their 

logistics processes and to optimize resources, route planning, and operational 

workflows, ensuring sustained service quality in a dynamic market. 

Delivery Time 

Delivery time refers to the duration between the placement of an order and its successful 

delivery to the designated destination, and it plays a pivotal role in determining the 

overall performance of freight services. Delivery time is a critical performance metric 

that directly influences customer satisfaction, operational efficiency, and overall 

performance within the freight sector (Gunessee & Subramanian, 2018). Freight 

companies are often evaluated based on their ability to minimize delivery times while 

maintaining accuracy, safety, and cost-effectiveness. Faster and more reliable delivery 

times contribute to improved supply chain efficiency, as they enable companies to meet 

customer demands promptly, reduce inventory costs, and increase the turnover of goods 

(Rushton, et al. 2017). Moreover, in global logistics, where businesses rely heavily on 

timely shipments to maintain lean operations and avoid stockouts, minimizing delivery 

time is essential for enhancing trade.  (Christopher, 2016). Freight companies use 

various strategies to optimize delivery times, such as route optimization, technological 

integration, real-time tracking, and improved coordination with customs and regulatory 

bodies (Hilmola, 2019). Therefore, delivery time not only serves as a key determinant 

of service quality but also functions as a core indicator of a freight company’s 

operational performance and its ability to meet market expectations efficiently. 

 

Daystar University Repository

Library Archives Copy



 

40 

 

Fleet Utilization Rate 

The Fleet Utilization Rate is a critical metric used by freight companies to assess the 

efficiency of their vehicle operations, directly impacting overall performance. It refers 

to the percentage of time a company’s fleet is actively engaged in transporting goods 

versus the time vehicles remain idle or underutilized (McKinnon, 2021). A high 

utilization rate indicates that the fleet is being maximized, reducing the per-unit cost of 

transportation, and enhancing operational efficiency by ensuring that resources, such as 

fuel and labor, are used effectively. This metric is crucial for determining the capacity 

management of a fleet, identifying potential inefficiencies such as excessive downtime, 

suboptimal routing, or vehicle maintenance delays (Suroso, 2022). Freight companies 

use this data to optimize vehicle scheduling, plan routes that minimize empty miles, 

and ensure that deliveries are made in a timely and cost-effective manner. Freight 

companies not only reduce operational costs but also improve service levels by 

increasing the reliability and timeliness of shipments by improving the utilization rate.  

Ultimately, this metric is an essential indicator of logistical performance and plays a 

vital role in the profitability and overall performance of freight companies (Göçer et 

al.,  2022). 

Organizational Culture 

Organizational culture refers to the collective beliefs, norms, and values shared within 

an organization, serving as the foundation for strategic initiatives (Kipsang & Muganzi, 

2024). According to Adebayo et al. (2020), organizational culture plays a crucial role 

in the successful execution of strategies. For any strategy to be effectively developed 

and implemented, it must align seamlessly with the organization’s culture. 

Consequently, it is essential to establish initiatives and goals that foster a culture 

supportive of the organization’s strategic direction over time. As noted by Shea et al. 

Daystar University Repository

Library Archives Copy



 

41 

 

(2023), when organizational culture aligns with strategic implementation, it enables 

efficient operation within a dynamic market. 

A cohesive and robust culture is vital for driving strategic innovation and enhancing an 

organization’s performance through effective market positioning and goal alignment 

(Khaskhely & Sethar, 2022). When an organization’s culture prioritizes productivity, it 

can successfully achieve its core missi