The Influence of Positioning Strategies on Competitive Advantage of the Insurance Firms in Kenya

Abstract

In the 21st Century economy, firms deal with uncertain and dynamic environments. In order to be successful, Firms are required to position themselves strategically in order to handle and take advantage of the ever changing markets. They must be ready to handle issues such as global competition for the firm to maintain a competitive advantage. The objective of this study was to establish the influence of positioning strategies on competitive advantage of Insurance firms in Kenya. The study was anchored on two theories; the Resource based view theory and Network approach. The study considered using descriptive research design and the researcher use a survey method. Population of interest in this study involved 53 Insurance Companies in Kenya as per the insurance regulatory authority (IRA, 2015). It is from this list of registered companies that the respondents were drawn. This study used primary data as the source of information. This Primary data offers first-hand information as it is collected from original sources that have not been previously collected. The researcher collected this data through the use of a structured questionnaire, comprising of both open and closed ended questions. Descriptive analysis was used in terms of standard deviation and means. Frequencies and Percentages were used for data presentation. Multiple regression analysis was also be used to determine relationship between the variables. Based on the findings majority (32.1%) of the respondents were managers, 9.6% of the respondents had worked in various firms for more than 10 years. Majority 51% of the firms had more than 100 staffs. 45.28% of the respondents indicated that the ownership of the insurance firms was predominantly local. From the finding 57.8% of the variations in competitive advantage of Insurance firms in Kenya are explained by the positioning strategies (measured by cost leadership strategy, product differentiation, product usage, positioning strategy based on competitors and company objectives positioning).The study recommends that the Insurance firms should position themselves in the market and make use of the various positioning strategies as any organization not engaging in strategic positioning is losing an opportunity to build a competitive advantage. The government is also an important player in the external environment of the insurance firms. The government should therefore put in place policies and regulations in place that stimulate growth in the industry.