Effect of Competitive Strategies on Performance of Pharmaceutical Manufacturing Companies in Nairobi Metropolitan Area Maryann Kanyingi

Abstract

In a business context which is marked by rivalry that is intense, advancements of technology rapidly and rivalry for prospective customers, a demand is growing for profit-oriented organizations to craft strategies that are competitive in order to attain competitiveness relative to its rivals and guarantee performance that is superior. For long, manufacturing companies in the pharmaceuticals industry in Kenya have traded in an adverse business context that is volatile. The cutthroat dynamics have consequently led to a majority of manufacturing firms in the pharmaceuticals industry losing their proportion of the market, volume of sales, production cost and profitability. they have consequently resorted to adopt strategies aimed at building their competitive positions in comparison to rival firms with a view to endure competition and outperform rivals. It is unexplored however, how these strategies that are competitive adopted, predict performance thereof. This study endeavored to fill this gap by ascertaining how strategies that are competitive influence manufacturing firms.in the pharmaceuticals industry in Nairobi Metropolitan Area, influence performance. A cross-sectional design was taken in this study and the target population comprised relevant departmental heads concerned with business, strategy development or their matches, from the 35 manufacturing firms in the pharmaceuticals industry in Nairobi Metropolitan Area. Due to the considerably small target population, a census survey was adopted, by which all manufacturing firms in the pharmaceuticals industry in Nairobi Metropolitan Area were selected in the study. Gathering of primary information was conducted by use of a structured questionnaire. Computations of both inferential and descriptive statistics were then conducted. Results show that performance is at 95% confidence level influenced significantly by focus strategy (β = .315, Sig.=.049<.05), strategy of differentiation (β = .286, Sig.=.043<.05) and cost leadership (β = .355, Sig.=.018<.05). It is concluded in the study that cost leadership, focus and differentiation strategies have an effect which is significant and positive on performance of pharmaceuticals industry’s manufacturing firms in the Nairobi Metropolitan Area. The study thus recommends that manufacturing firms in the pharmaceuticals industry that seek to achieve performance that is superior ought to adopt as strategies that are competitive, cost leadership, strategy of differentiation and strategy of focus.