Competitive Strategies Adopted By Chinese Firms In The Building And Construction Industry In Kenya

Abstract

The study focused on the competitive strategies adopted by Chinese firms in building and construction industry in Kenya. Since Kenya has become the latest beneficiary of the battle between Japan and China for control of Africa’s economic landscape, raking in billions of shillings in new project finance and grant funds in the past two years. Though China has been the more brazen hunter of opportunities in the country’s vast infrastructure and natural resources sectors, the scales have been tilting in favor of Japan in recent months as the Asian economic powerhouse unleashed its corporate giants for pieces of the action. China signed deals with Chinese firms ranging from oil exploration to mining and infrastructure developments. The construction of an eight-lane highway on Thika road began in 2010 following the government’s signing of a sh27 billion contract with three Chinese road construction firms. Among Chinese firms contracted for this project included China Wu Yi Company, SinoHydro corporation ltd and Shengli engineering construction. The building and construction sector key economic indicators have recorded improved performance powered by growing economy and stable interest rates, remittances from abroad and spending on development projects, the improvement of construction sector like mid-range regional and national companies capable of handling multiple projects within one country, to larger players with specialist interests, for instance, shopping mall construction, or office blocks, operating in multiple countries. Extensive opportunities exist particularly in the construction of middle and low income housing, manufacture and supply of building materials, renovation and rehabilitation of transport infrastructure. The study was executed through use of questionnaires that were administered through drop and pick method to all Chinese firms in the building and construction industry in Kenya. Porter’s generic strategies were greatly practiced by Chinese firms in the building and construction industry in Kenya while Ansoff growth strategies and Pearson and Robinson grand strategies shared equal points. The most practiced competitive strategies by Chinese firms in the building and construction industry in Kenya adopted were targeting bulk customers, price wars, offering quantity discounts for bulk purchases by customers, rent utilization by ensuring go-downs are well organized to enable maximum number of products are stoked, offering cash discounts to customers, and offering credit facilities to repeat customers respectively. The most adopted competitive strategy was targeting bulk customers while the least adopted competitive strategy was advertising on radio, billboards and newspapers. The study recommends that competitive strategies are of great importance since they confirm to the literature on the merits they offer to the firm once the right choice is implemented. Thus firms need to identify the right mix of Porter’s generic strategies, Ansoff’s growth strategies and Pearson and Robinson grand strategies in order to minimize strategic conflict.