Strategies Adopted by Foreign Companies in Kenya to Gain Competitive Advantage

Abstract

Organizations both in the developed and developed countries are constantly being faced by threats and challenges that pose a threat to their sustainability. Particularly, the foreign companies operating in new have a greater task in attaining competitive advantage as compared to the local firms. Despite the foreign companies contributing greatly to the economy in terms of employment creation and revenue collection, their penetration is not easily attained. The study sought to determine strategies adopted by foreign companies to gain competitive advantage in Kenya. This study adopted the cross sectional survey research design in obtaining information pertaining to the research objectives. Due to the population being small and manageable, a census approach was employed so as to cover all the 113 foreign companies. The respondents were the senior managers in the companies or their equivalents. The study used purely primary data that was collected using questionnaires. Quantitative data from the close ended questions was interpreted by use of statistical package for social sciences (SPSS) and analyzed through the use of descriptive statistics which include frequencies, percentages, standard deviation and arithmetic mean. The data was presented in graphs and tables. The strategies found out to be put in place included; strategic alliances, joint ventures, franchises, exports, contracts, wholly owned while mergers, licensing, direct acquisitions and foreign direct investments. Whereby, the most adopted venture strategy was business partnership and separate joint venture business and corporations. It was also found out that these strategies were complementary in nature whereby more than one strategy could be adopted by one firm in gaining competitive advantage. The study thus concludes that the strategies have been adopted by the companies as a way of gaining competitive advantage. The study therefore recommends that the managements at the foreign companies to highly priorities strategy formulation and implementation. The study further recommends that the policies developed should be designed in such a way that they favor strategy implementation in the firms and cause minimal legal barriers. The study was however not able to cover all the strategies adopted by the companies as it was limited to three main strategies namely; strategic alliances, ventures and franchising. The study thus suggests that further studies may be conducted on the other determinants of competitive advantage in these firms, other than the strategies employed. This will enable comprehensive determination of the concept of competitive advantage in the foreign companies.