Turnaround Strategy and Competitive Advantage of Kenya Airways

Abstract

Kenya Airways has in recent years witnessed considerable headwinds in its actions from structural economic situations and geopolitical challenges which brought about low competitive advantage. The study aims at establishing the relationship between turnaround strategy and competitive advantage of Kenya Airways. The study was guided by the following theories, resource-based view theory and institutional theory. This research adopted a case study. A case study is an in-depth investigation of one single phenomenon and institution primarily determining the relationship purpose in the behavior under study. This study relied on primary data. Primary data is mostly collected using interview guide or schedule based on suggestions on questions that focused on competitive advantage. The study used a content analysis in the data analysis. From the findings, turnaround strategy is a financial revival of a firm that has been performing badly for an extended period. In order to achieve a turnaround strategy, a firm must recognize and spot its challenges, consider changes in management, adopt and apply a problem-solving strategy. From the findings, there is positive evidence connecting educational attainment to Kenya Airways’ competitive advantage. Majority of productive firms have a tendency of employing highly skilled labor force than the least productive counterparts who are below the set standards. From the findings, turnaround strategy emphasizes the upgrading of operational efficiency and it is possibly the most appropriate approach when a firm’s problems are pervasive but not yet critical. The roles of culture change in rejuvenating and re-adapting operational effectiveness in Kenya Airways. Culture challenges the Kenya Airways’ past beliefs where it acts as an indication to staff that this behaviour is satisfactory and leads to the generation of innovative solutions that would not have otherwise been possible. From the findings, a strategy which the national carrier normally uses is stretching accounts payable that is, paying bills as late as possible without any damage to its credit rating. Stretching accounts payable strategy helps in reducing the implicit cost of giving up cash discount in Kenya Airways. It is recommended that for firms that are faced with decline there is need to pursue a turnaround strategy so as to improve its competitive advantage. The study further recommends that whenever a firm is faced by a decline and it desires to attempt turnaround it should consider replacing the current management and hire an experienced team to steer the turnaround process.