Influence of Differentiation Strategy on Performance of Pharmaceutical Companies Operating in Kenya

Abstract

This study is undertaken to establish the adoption of differentiation strategies by pharmaceutical companies operating in Kenya and how the strategies influence performance of these companies. Differentiation strategy entails the firm creating a unique product or service that satisfies the consumer needs. Performance is concerned about the process of monitoring, evaluating and reporting organizations progress in line with the organization objectives and goals. The study employed descriptive survey research design for collection of quantitative data by use of standardized questionnaire. Differentiation strategy were divided into sub strategies such as product value addition, service differentiation, distribution networks, promotional and marketing strategies. Target population was the manufacturers and distributors of pharmaceutical companies operating in Nairobi area because most of the pharmaceutical companies are based in Nairobi. A total of 32 firms (manufacturers and distributors) responded to the questionnaire and the finding of these were generalized to the larger population that is the pharmaceutical industry. The study findings show that the services strategies is mostly applied as they employ qualified personnel who do direct marketing and sales to the targeted consumers. The findings determined that there is a positive relationship between differentiation strategy and performance of organizations. This relationship analysis was done using regression analysis by the use of SPSS software. The challenge met in doing the study is that the targeted respondents who were managers and directors were not able to respond to the questionnaires due to different reasons such as time factor. Differentiation can be applied in other industries operating in Kenya for further studies on this topic.