COMPETITIVE STRATEGIES AND PERFORMANCE OF SUPERMARKETS

Supermarkets have become very competitive today and are facing challenges due to the changing lifestyles and the demanding nature of today consumers. Amid heightened competition, supermarket managers need to understand the impact of different competitive strategies in order to choose appropriate ones that lead to survival and prosperity of the supermarkets' performance. The purpose of the study is to identify the competitive strategies adopted by the supermarkets and to analyze the linkages between the competitive strategies and the performances of supermarkets at determining the mediating effects of firms' operational characteristics, viz location, capital, managerial skill and experience, network and supply chain on the link between the competitive strategies and performance of supermarkets in Yangon. Primary data are collected from (15) senior managers and (35) branch managers of supermarkets through in-depth personal interviews and a questionnaire survey regarding their compete practices and organization performance. Moreover, performance data are also collected from (481) employees and (512) customers from selected supermarkets in Yangon. This study applies Path Analysis in order to identify the direct and indirect effects of operational characteristics between competitive strategies and firm performance. The study found that cost leadership strategy is practiced by ten supermarkets; differentiation strategy by three supermarkets and focus strategy by two supermarkets. The cost leadership strategy has significant negative effect but the differentiation strategy and the focus strategy have significant positive effect on supermarket's performance measuring in terms of firms' growth, employees' satisfaction and customers' satisfaction. Generally, operational characteristics have the mediating effects on firm performance when supermarkets practices differentiation strategy and focus strategy but is no mediating effect where practicing cost leadership strategy. More specifically, among operating characteristics, the location has shown no mediating effect while the capital, managerial skills and experiences, and network and supply chain have partially mediating effect on the link between competitive strategies and firm's performance in terms of firm's growth, employee satisfaction, and customer satisfaction. Thus, it can be concluded that differentiation and focus strategies are currently appropriate as competitive strategies for improving the performance of supermarkets in Myanmar. Even though most of the supermarkets are practiced the cost leadership strategy, this study found that this strategy has no impact on firm performance since the purchasing power of the most ordinary people in Yangon is insufficient to buy at the supermarkets regularly. Moreover, the supermarkets that apply cost leadership strategy have the weaknesses in terms of product varieties, availability, and quality but not in price competitiveness. These facts highlight that the supermarkets which pursued cost leadership strategy need to provide a variety of low cost affordable quality products for target customers by investing sufficient capital for the market coverage in terms of products, place and promotion. Therefore, it can be concluded that if supermarkets can offer the products and services with appropriate marketing mix in accordance with the characteristics of target market and thereby, able to fulfill to meet the requirements of customers, the cost leadership strategy may become effective one for supermarkets in Yangon. By doing so, the changes and progress can take place for the supermarkets in Yangon in the coming years