Effect of Digital Technology on Strategy Formulation by Real Estate Agency Companies in Nairobi, Kenya

Abstract

The objective of this study was to determine the effect of digital technology on strategy formulation by real estate agency companies in Nairobi, Kenya. The study was supported by diffusion of innovation theory and resource-based view. The study adopted a cross-sectional survey on a population of 300 registered real estate companies in Nairobi. A total of 169 respondents’ real estate companies was sampled. Primary data was collected using a self-administered questionnaire. The study adopted descriptive statistics for analysis in addition to correlation and regression analysis. The findings showed that the respondents agreed that their organizations had adopted digital technology in their business. The digital technologies related to social media and online advertising together with data analytics for market insights and digital channels for engagement with clients together with customers. The findings further showed that the organizations failed to train the employees on the usage of these digital technologies. The findings also showed that digital technology and strategy formulation had a positive relationship shown by a correlation coefficient of 0.539 (p=0.000). The regression analysis showed that digital technology had a significant effect on strategy formulation shown by regression coefficient of 0.571 (p=0.003). The study concluded that digital technology has a significant effect on strategy formulation of real estate agents in Nairobi. The study recommends that real estate agents in Nairobi increase their adoption of emerging technologies for improved strategy formulation. They also need to come up with digital training programs aligned to the strategic objectives. This study will have implications to practice, policy and theory. This will be based on the study providing an understanding on how digital technologies affect the strategy formulation within real estate agents. The real estate agents with the understanding will be able to come up with strategies that will enhance strategy formulation through digital technologies. The policy makers would also come up with relevant policies for improved strategy formulation and adoption of digital technologies in the real estate sector. The study will add on the strategic management literature in relation to strategy formulation and the role of digital technologies.