Strategies Adopted by Multinational Corporations to Cope with Competition in Kenya
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Date
2012Author
Ogutu, Martin
Samuel, Carol M
Type
OtherLanguage
enMetadata
Show full item recordAbstract
Multinational corporations (MNCs) operate in a global environment unfamiliar in
political, economic, social, cultural, technological and legal aspects. Increased
competition among multinational corporations and the entry of other players in the
Kenyan market necessitate the design of competitive strategies that guarantee
performance. Creating strategies for coping with competition is the heart of strategic
management which is critical for the long term survival of any organization. This paper
examines the strategies adopted by MNCs to cope with competition in Kenya. To
establish the strategies adopted by the MNCs, forty questionnaires were administered to
senior managers of MNCs targeting 19 percent of the total population of 213 MNCs in
Kenya. Stratified disproportionate sampling was used to select the forty MNCs. This
study established that MNCs in Kenya have adopted a number of strategies including:
better quality, excellent customer service, innovation, differentiation, diversification,
cost cutting measures, strategic alliances, joint venture, mergers and acquisitions, as
well as, lower prices, to weather competitive challenges. The study found that the most
popular strategies adopted by MNCs that were both foreign and locally owned (mixed
ownership) were better quality, excellent customer service, lower price, franchising and
licensing. The study further found that strategies like innovation, differentiation,
diversification and strategic alliances were used more less to the same extent by both
types of MNCs. The only strategies that purely foreign owned MNCs were found to use
more than the MNCs that were both foreign and locally owned were cost cutting
strategies. This study has important implications on the role of board of directors
regarding strategies adopted by MNCs in host countries. There were significant
differences between the two types of MNCs regarding the strategies that were adopted
most.
Citation
DBA Africa Management Review 2012, Vol 2 No 3, pp 69-82Description
Strategies Adopted by Multinational Corporations to Cope with Competition in Kenya