Strategies Adopted By Shopping Malls In Nairobi City County To Gain Competitive Advantage

Abstract

All organisations are open systems as they interact with external environment for their inputs and outputs. The ever changing environment calls for organisations to keep interacting with it by evaluating their strategies based on the available resources, internal capabilities, and core competences. Executives are under pressure to keep analysing the environment surrounding their organisations to provide resources needed to make goods and services, as a source of opportunities, to ward off threats, and to shape various strategic decisions for their organisations to succeed. Being a new concept in Kenya, shopping malls industry has seen a lot of growth in number of upcoming malls within the same or different regions. This has led to high competition within the industry and therefore to remain competitive, Developers must adopt competitive strategies that outperform current or potential competitors. The study had three objectives: to establish strategies used by shopping malls in Nairobi City County, establish whether these shopping malls have competitive advantage and determine strategies adopted to gain competitive advantage. The study adopted a cross-sectional survey design as it represented what was going on at only one point in time and allowed the researcher to generalise findings as respondents were subjected to same variables. Data was collected from twenty three (23) operational shopping malls by use of semi-structured questionnaire and analysed through descriptive statistics for quantitative data and content analysis for qualitative data. The results were displayed by use of percentage, means, frequency tables, and pie charts. The study found out that shopping malls in Nairobi City County used various strategies to cope with industry forces with focus strategies being the most preferred while reactors and prospectors strategies were the least preferred. Respondents perceived shopping malls to have competitive advantage despite the increase in development of new malls. Shopping malls adopted various strategies that were favourable to them to gain competitive advantage. Branding through aggressive marketing and advertisement was the most preferred strategy while reducing operation costs to increase profitability was least preferred strategy. The study concluded that for shopping malls to survive in the increased level of competition in the industry, Developers must take action that create a defendable position to cope with competitive pressures and forces by adopting strategies that are not easily imitated by the current or potential competitors. In addition, they must keep evaluating the external environment to ensure they have a strategic fit between the external environment and their available resources, core competencies and internal capabilities. Tenant mix strategy was widely used to gain competitive advantage. To ensure this strategy aligns with the dynamics in the environment, the researcher recommended that Developers should continuously strategically reconsider the types and brands of stores within the shopping malls that consumers are attracted to other than only focusing on anchor tenants. The major limitation of the study was that respondents were reluctant to give full information for fear that the information may get to their competitors. Further research may be carried out to establish how location affects a mall’s level of competitiveness.