Competitive strategies adopted by Tata Chemicals Magadi Limited in Kenya

Abstract

Strategy is a game plan that management puts in place to position the company in its chosen market arena, competing successfully, pleasing customers and achieving good business performance (Thompson & Strickland, 1989). Competitive strategy on the other hand refers to how a company competes in a particular business and is concerned with how a company can gain a competitive advantage through a distinctive way of competing. Tata Chemicals Magadi is an international company that produces Soda Ash and exports 90% of the product to four major regions; South East Asia, Middle East, Indian Sub-Continent and Africa. This study had objectives to be analyzed. The first objective was to determine the competitive strategies adopted by Tata Chemicals Magadi Limited. The second objective was to establish the challenges encountered by Tata Chemicals Magadi Limited in applying the various competitive strategies. The data for both objectives was collected through an interview guide. The data collected was analyzed using content analysis. The findings indicated that Tata Chemicals Magadi Limited uses the overall cost leadership as its major competitive strategy. The greatest challenge encountered by TCM is the ever rising cost of energy (mainly fuel and electricity) thus driving the variable costs upwards and consequently putting pressure on the margins. Fuel (HFO) and electricity are the major costs incurred by the company in the production process