Influence of Adopted Strategies on the Value Chain Performance of Vivo Energy Kenya Limited

Abstract

This study sought to determine the influence of adopted strategies on the value chain performance of Vivo Energy Kenya Limited in developing competitive advantage. To achieve the objective of this study, the researcher used a descriptive case study which was structured as a qualitative research. The population of the study was the supply chain manager and the country marketing manager. This study used both primary data and secondary data sources. Primary data was collected using an interview guide which was administered by drop and pick later method at an agreed time with the researcher followed by a face to face interview. Secondary data was collected from various sources like journals, newspaper articles, company websites, publications including various reports and records of past events that were also reviewed to compile evidence of competitive strategies that had been observed. Quantitative data was collected using an interview guide and was analyzed by the use of excel and presented through tables. Qualitative data was analyzed using content analysis which is the best suited method of analysis in a case study. The study found out that Vivo Energy Kenya Limited was owned by three key shareholders namely Vitol Trading, Royal Dutch Shell and Helios investment partners with the core area of sales and marketing of Shell Branded Fuels, Liquefied Petroleum Gas and Lubricants. The study also found out that the company size had contributed to industrial supply chain and the company had used convenience stores, devolution of storage facilities and maintaining optimal HSSE standards strategies in its value chain management. Vivo Energy Kenya reviewed its value chain strategies after one year. The company’s key stakeholders included customers, the government, Joint venture partners and other oil marketing companies through the open tender system conducted every month. The company adopted the various value chain management strategies due to the desire to boost market share, the focus to satisfy its customers, consideration of the environment, government policies that changed from time to time and also to stay ahead of its competitors. Strategic value chain management had contributed to financial performance with increased profitability and non-financial performance through increased employee morale and customer satisfaction. Value chain management strategies also enhanced good business practice and brand loyalty which had led to direct positive financial impact to the company. Value chain strategy management had played a key role in improvement of the short-term and long-term performance by focusing on customers which had resulted to an increase in market share significantly and growth had been inevitable. Improvement in the skills and technological development of Vivo Energy Kenya Limited had been witnessed by focusing on efficiency and effective processes. The study revealed that Vivo Energy Kenya Limited faced many challenges in day-to-day running of the business across the country. The challenges included government regulations imparting the oil industry, competition from other oil marketing companies and constrained infrastructure in Kenya and the East African region. The challenges were addressed through lobbying for policies that favored conducive business environment through Supplycor Kenya Limited and building great relations with government agencies such as the Kenya Revenue Authority, Energy Regulatory Commission and Kenya Bureau of Standards.