Response Strategies Adopted by Motor Vehicle Dealers in Kisumu City, Kenya, to Changes in the External Environment

Abstract

The business environment is highly amorphous characterised by high competition, unpredictable economic shifts, and the constantly changing customer preferences. To be able to survive and manoeuvre through such turbulent business environment, organizations need to formulate strategies that constantly match institutional capabilities to the prevailing external environmental requirements. This study investigated the response strategies adopted by motor vehicle dealers in Kisumu city, to external environmental changes. The study objective was to investigate the response strategies adopted by motor vehicle dealers in Kisumu City, external environmental changes. The study was modelled according to descriptive survey research design with mixed methods. Quantitative data was collected among 33 respondents drawn from 33 motor vehicle dealers operating in Kisumu using structured questionnaires. The data was then analysed through descriptive statistics and Pearson Correlation statistics of SPSS software. The study findings indicate embracing technology strategy (Mean= 4.93), cost leadership (Mean= 4.43), market development and penetration (Mean= 4.18), and diversification (Mean= 4.02) as the most frequently applied response strategies by the motor vehicle dealers in Kisumu against the external environmental changes. The findings also indicated that embracing technology (Mean= 4.92), followed by diversification (Mean= 4.75), market segmentation (Mean= 4.46) and cost leadership (Mean= 4.31) as the most effective response strategies adopted by motor vehicle dealers in Kisumu City. The study therefore concluded that embracing technology, cost leadership, market development and penetration and diversification strategies are the mostly applied and effective response strategies by the motor vehicle dealers in Kisumu City against external environmental changes. This study further recommends that policy makers should invest more on research and environment scanning, develop policies adaptable to changing environment and offer training to motor vehicle dealers on strategic thinking. It is also recommended that management of motor vehicle industry embrace strategic management and strategic thinking aimed at innovation and adoption of strategies that are flexible and aligned with their environment. The motor vehicle industry should embrace technology development, invest in diversification opportunities, adopt differentiation strategies and be innovative in order to stand out competitively and be successful in the volatile market.