Managers Perception of the Relationship Between Strategic Alliance and Competitive Advantage in Africa Air Rescue Insurance Kenya Limited

Abstract

This study analyzed managers’ perception of the relationship between competitive advantage and strategic alliances in AAR Insurance Kenya Limited. The study adopted the case study research design. The objective of the study was to determine the managers’ perception of the relationship between strategic alliance and competitive advantage in AAR Insurance Kenya Limited. The research study assumed is a case study design to give a holistic account of the research. The study interviewed six senior managers who are involved in strategic management and processes in the organization. The data was analyzed using content analysis, it helped to identify the concepts and the key words in the text and generate relevant results. The study showed that AAR Insurance had engaged in strategic alliances and specifically engaged in equity alliances severally and just one Joint ventures alliance and never engaged in contractual alliance. The study distinguished that factors that directed AAR Insurance to be involved in strategic alliances with other organizations were two key motives; transaction cost motive and competitive position motive: leveraging on economies of scale, digitization, entry into new markets, market penetration, capturing international markets, improving the capability to develop new products, and distributing organizational resources. The research found that AAR Insurance had attained competitive advantage because of the getting involved in strategic alliances as depicted in increased profitability and market share. AAR Insurance has also generated huge streams of revenue because of their strategic alliances with financial institutions like commercial banks and credit facilities in Kenya. The study recommendation is that the players and regulators within the insurance industry should involve themselves in strategic alliances since strategic alliances help a firm gain competitive advantage and further impacts the lives of their customers in a very crucial manner. The study also recommended that similar studies be simulated across all the other insurance company managers to access how and if strategic alliances can result in competitive advantages in the insurance market in the country. Another suggestion was to conduct a study like this to gauge whether other organizations that have been involved with AAR Insurance achieved any competitive advantages.