Competitive strategy implementation and its effect on performance in large private sector firms in Kenya
Abstract
Business survival is dependent on its competitive strategy and how it is
implemented. The goal of every competitive strategy is to achieve sustainable
competitive advantage, which is achieved through implementation. There is
contention in literature whether to implement single generic strategies exclusively or
to combine them. In addition there is an ongoing discussion on whether to adopt
win-lose or win-win competition. On the other hand, literature shows that 70 percent
of CEOs failure is due to poor execution of strategies while CEOs in East Africa cited
competition as their third greatest challenge, after infrastructure. Hence, this thesis
is on the competitive strategies implemented by large private sector companies in
Kenya and reviews how the generic strategies are implemented with the aim of
addressing these apparent concerns.
The research population comprised large private firms, with the sample frame
involving the top 300 private companies. Random sampling was used while data
was collected using a structured questionnaire which was executed using combined
methods of e-mail communication, telephone and face to face interviews. The
response rate was 42 percent, representing 59 firms drawn from across service and
manufacturing firms in all economic sectors. Tools for data analysis comprised
descriptive statistics, factor analysis, t-test, ANOVA, correlation and regression
analyses, using SPSS software.
The key findings were that there were three strategic groups of low cost leaders,
differentiators and dual strategists in proportions of 1 :3:6 respectively. Dual
strategists were found to outperform firms that adopt one strategy exclusively. The
study found evidence to support adoption of win-lose competitive posture. It also
provides a conceptualisation of the implementation challenge and developed a linear
regression model for overcoming it, through use of predictors of implementatation
performance. Firms that use soft and hard implementation armaments together had
higher performance than those that exclusively used either soft or hard
implementation armaments. Finally the study provides an omnibus strategy model
that may be used to guide managers on prioritisation and implementation of
strategies. The findings indicate that the factors that underlie sustainable
competitive advantage include adoption of dual strategic advantage and provision of
a strategic fit -in the use of soft and hard implementation armaments and the
organisational strategic variables.
The study setting revealed an unfavourable business environment, while the
respondent firms exhibited exemplary performances. In consideration of the
immense contribution by the private sector to the economy, the study recommends
that Government policy be appropriately shaped to be responsive to demands from
this group for conducive business environment. In addition, managers are
encouraged to make readily available the positive predictors of implementation and
performance in order to facilitate improved realisation of organisational objectives.
The study experienced constraints on time and finance, though these limitations
were trivial and did not affect the quality of the work and its findings in any significant
manner. It is suggested that future research be conducted focusing on the strategic
target dimension of Porter's (1980) model to determine which position holds in the
ongoing discussion on performance of firms 'stuck in the middle'.
performance. Firms that use soft and hard implementation armaments together had
higher performance than those that exclusively used either soft or hard
implementation armaments. Finally the study provides an omnibus strategy model
that may be used to guide managers on prioritisation and implementation of
strategies. The findings indicate that the factors that underlie sustainable
competitive advantage include adoption of dual strategic advantage and provision of
a strategic fit -in the use of soft and hard implementation armaments and the
organisational strategic variables.
Citation
Degree of Doctor of Philosophy in Business AdministrationPublisher
University of Nairobi School of Business
Description
PhD Thesis
Submitted in Partial Fulfilment of the Requirements for the
Degree of Doctor of Philosophy in Business Administration