Relationship Between Dynamic Capabilities and Opportunity Exploitation by Petroleum Importing and Marketing Companies in Kenya
Abstract
High demand of petroleum products, price volatility, increased competion and stringent
regulatory requirements bring market dynamism in the petroleum industry and require
quick responses in matching the firm’s resource and capability portfolio with
environmental opportunities.Petroleum importing and marketing firms in Kenya due to
the dynamic environment in the industry, need to integrate, build, structure and
reconfigure internal and external competences by generating multiple sustained
competitive capabilities simultaniously with the changing, government regulations,
demand levels and consumer perception international price levels.The objectives of this
study were to determine the dynamic capabillities developed by the petroleum importing
and marketing companies in Kenya; to establish the relationship between the dynamic
capabilities and opportunity exploitation by the petroleum importing and marketing
companies.Data was collected through questionnaires from a population of 42 Petroleum
marketing and importing companies and was analyzed quantitatively. The findings of the
study indicate that organizational skills & resources, process integration and financial
position satisfactorily contributed to exploitation of existing opportunities. While,
Knowledge creation process, technology, integrative strategies, scenario process,
collaboration network, leveraging capability, contribution were above average in
opportunity exploitation contribution. Organization reengineering, external integration of
capabilities and linkage with external firms were just averagely contributing to
exploitation existing opportunities. The dynamic capability activities that most petroleum
importing and marketing companies greatly implemented were, integrating resources,
leveraging knowledge, Market positioning, Networking and information gathering. The
study concluded that the petroleum importing and marketing companies had knowledge,
resources and capability transformation, market analysis and opportunity identification
and seizing capabilities which contributed to opportunity exploitation. The capabilities
are related to opportunity exploitation but high dynamic capability level did not measure
directly to opportunity exploitation. The critical challenges that hindered satisfactory
contribution to exploitation of opportunity were; scanning the environment for
opportunities and threats, resource allocation, knowledge sharing, reconfiguring
resources, exploiting opportunity, adaptation to competitive environment and market
analysis. It is recommended that while considering factors for dynamic capability
development; the actors, strength, weakness, opportunities and threats, existing skills,
process and structure, core competence and capabilities, adaptation to competitive
environment and the opportunities should be given high priority. To enable achievement
the level of capability required to have a leveraged competitive advantage as the
petroleum companies exploit the opportunities in the dynamic market.
Citation
Masters of Business AdministrationPublisher
University of Nairobi