ABSTRACT 

Tough economic times, stiff competition, globalization, terrorism among other challenges have led several firms to adopt strategies that would enable them to remain competitive in whichever industry they are operating in. The commonly known competitive strategies are the Cost Leadership, Differentiation and Focus. Whatever the choice a company makes to position the firm in the competitive market is dictated by the industry structure (attractiveness) and the environmental forces which may emanate from the macro and micro levels. For a firm to win, it will depend on how it is able to apply or change the competitive rules to suit the unrevealing situation. The study focused on the relationship between the generic strategies and competitive advantage among the firms in the tourism industry in Kenya. A sample of 13 firms was selected from key tourism firms (hotels and tour operators within Nairobi), Kenya Wildlife Service and National Museums of Kenya. The choice of respondents was officials serving at managerial level in the following departments: Planning, Operations, Marketing and Finance in each firm selected. Data was collected from primary sources. Questionnaires were developed and distributed to the respondents by the Researcher. Descriptive statistics, (mean and standard Deviation) were used to analyze the data. Tables were used to present the data. Inferential statistics of correlation analysis was used to draw conclusion and recommendations were made based on the findings. This study finds that there is positive correlation between the three generic and Competitive Advantage. Specifically, it was found out that differentiation and cost leadership have positive correlation at less than significant level, (p