Response Strategies by Oil Marketing Companies in Kenya to Fluctuating Oil Prices

Abstract

All organisations irrespective of industry inclination exist in an environment in which they operate in. The changes occurring in these environments do affect the businesses in one way or the other and in order to remain competitive, firms have to formulate response strategies. Therefore, response strategies are the set of actions and decisions taken by organisations that ensure an organisation remains fit to changing environment. The oil industry in Kenya is a major economic drive being the main source of energy with over 75% dependency. In the recent past price the world oil prices have been fluctuating and Kenya being a net importer has bore the spikes of those fluctuations. Therefore the objective of this study was to determine the response strategies adopted by oil marketing companies in Kenya to fluctuating oil price. The study adopted a descriptive research design and questionnaires as the data collection tool. The population of the study was all the 31 oil marketing firms in Kenya and the target respondents were operation managers. The data was collected and analysed using Microsoft excel tools. The findings indicated that A majority 50% to a great extent and 31.81% to a very great extent. Outstanding customer care as a response strategy 54.55% to a great extent and 36.63% to a very great extent. A significant majority, 72.73% of the companies focused building on ethical practices in times of fluctuating oil prices. Investing in research and technology was also relatively favoured with 63.64% indicating that it was employed to a very great extent. The researcher concluded that in the face of fluctuating oil price, oil companies should focus on value adding strategies such as those of product differentiation, customer care, cost cutting and technological advancements.