Effectiveness of international e-commerce strategy among selected registered motor vehicle dealers in Nairobi, Kenya.
Waboi, Andrew W
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This management research project sought to find out the effectiveness of international e-commerce as a business strategy and how it has led to business growth for motor vehicle dealers in Nairobi, Kenya. This objective was pursued by doing a survey among registered motor vehicle dealer firms selected based on their locations, that is, those that are situated along some major roads in Nairobi. It is believed that the findings of this report can be extrapolated to all motor vehicle dealers in Nairobi. The literature review looked at the definition of e-commerce, various forms of e-commerce, nature and features of e-commerce, e-commerce as a business strategy and its application in the international context; its benefits and challenges. A study through the literature showed that e-commerce when well harnessed would bring informational, operational and strategic benefits to any firm enabling the firm to use the world as its oyster. Application of e-commerce must however be implemented with the challenges of using e-commerce in mind. This will be helpful so as to be able to come up with ways to overcome such challenges some of which can be fatal for the business, if not appropriately tackled. Data analysed showed that most of the firms studied were established as from the year 2000 possibly because of the development of ICT that has been supporting this industry. These firms studied ranged from small to big firms with some firms selling below 100 vehicles per year while others selling above 400 units per year. Similarly some firms employed less than 10 employees while others employed over 30 employees. 63 percent of the firms studied were car bazaars while a 27 percent were agents of international companies. 95% of motor vehicle dealers in Nairobi practice international trade with a majority of them using international e-commerce in their purchasing, marketing and sales functions. International e-commerce has been widely practised in purchasing of motor vehicles, mostly second hand motor vehicles; spare- parts and vehicle accessories. These are mainly sourced from Japan, Dubai and the UK. The few firms which export their merchandise out of Kenya, sell mainly motor vehicles and spare- parts to customers in Uganda, Rwanda, DRC and Southern Sudan. In all these international business dealings e-commerce has played a crucial role to support the transactions. Additionally, international e-commerce has provided motor vehicle dealers in Nairobi with a platform that has helped among others: increase revenues; increase the number of customers and suppliers; provide more information about products and business partners. Similarly international e-commerce has helped these businesses access better products and services; reduce time of doing business and associated costs and improve relationships with their suppliers and customers. These benefits relate well with the main reasons why these firms started using e-commerce in the first place which are; e- commerce is faster than traditional commerce, has information richness and would help the firms keep up with other firms. These findings have led to the conclusion that international e-commerce has been a very effective strategy for businesses in the motor vehicle industry in Nairobi, Kenya. The major drawback cited that impacts on the effectiveness of international e-commerce strategy is the effect of the established business traditions and conventions. A recommendation for government intervention through clear policies has been proposed to address this problem. Additionally awareness of benefits and use of e-commerce need to be created by the business community so as to foster a wider acceptance of this method as a way of doing business, which offers greater benefits than traditional brick, mortar and paper based commerce.
University of NairobiSchool of Business