A Survey of Application of Information and Communication Technology for Competitive for Competitive Advantage of Firms Listed at the Nairobi Stock Exchange

Abstract

This study examined the application of lnformation and communication technology for competitive advantage by firms listed in the Nairobi Stock Exchange. The need for the study arose from the fact that many firms formulate strategies in order to survive in the turbulent market and most of these strategies can be linked to gaining competitive advantage in the market place. There are various ways firms can achieve competitiveness in an industry using ICT is one of them. This study covers background information in detail on how ICT is one of them. This study covers background detail on how ICT can aid competitive strategies and the different roles it plays, along with factors that determine its application. The objectives of this study were to determine the extent to which the firms on NSE use ICT to gain competitive advantage and to determine the factors that affect ICT application in these firms. A survey design was used and data were collected using questionnaires, which were administered using a "drop and pick later" basis. Most of the respondents were the IT managers in the 35 firms surveyed. Data were analyzed using tabulation and factor analysis techniques. Analysis revealed that firms that have been longer in operation had a great extent of ICT application in their strategies The findings also reveal that firms with relatively higher annual turnovers and many employees had higher extent of ICT application in their business operations and strategies. Overall, it was found that firms at NSE have an above average extent ICT application to gain competitiveness. Results of this study also indicate the various factors affecting ICT application at the firms with the most important ones being associated ICT costs, benefits and returns of ICT, identification of right ICT products and suppliers, computer crimes, level of competitiveness in industry and state of technological infrastructure in the country. Many of the firms that used ICT to a great extent cited the associated ICT costs and level of competitiveness in industry as factors that influenced their application, whereas firms with relatively lower ICT use cited computer rimes and state of technological infrastructure in the country. The other factors had relatively less impact on the firm’s ICT application for competitive advantage. However, the most important of these were ICT implementation and adoption time, firm’s ICT policies and the firm’s technological resources. Some limitation such as lack of enough time and less cooperation from a few of the respondent were encountered during the process of this study. However, the response rate obtained was sufficient for the purposes of this study. Future research in this field may be carried out focusing on firms and business sectors beyond the Nairobi Stock Exchange listings, and determining the kind of impact these factors have on ICT application that is, whether it encourages or discourages the use of ICT by firms in their competitive strategies. In conclusion, it is seen that firms quoted on NSE face a very competitive environment, and to counter this, most of them formulate competitive strategies that involve great u e of ICT systems. However, while doing so, they encounter various factors that determine their ICT application to gain competitiveness, with the mo t common one being the 1CT costs involved and the state of technological infrastructure in the country.