Technology Acquisition Strategies and the Performance of Companies Who Import and Distribute Pharmaceutical Products in Kenya

Abstract

The world is currently experiencing an information technology revolution that has drastically changed many aspects of the human life, from education, industry, economy and politics to entertainment. Technology has become very vital to all organizations that intend to remain competitive in the market. Therefore, organizations have adopted the strategies to embark on performance that will provide a source of competitive advantage and embrace the usage of technology. Technology acquisitions are acquisitions that provide technological inputs to the acquiring firm. It is an important process, especially for companies, due to its impact on performance and overall contribution to the goals of the company. The objective of the study was to determine the effect of technology acquisition strategies on the performance of pharmaceutical companies importing and distributing products in Kenya. The study used cross-sectional descriptive survey. The population of the study comprised of all the fifty licensed pharmaceutical companies in Kenya. The study used primary data that were collected through self-administered questionnaires. The data was analyzed by the use of descriptive statistics. The regression analysis was used to assess the relationship between technology acquisition strategies and performance. The adoption and usage of the technology acquisition strategies by the firms was determined by several factors that include firm strategy, market trends, technological capability and technological relevance. Other factors were found to be firm finances and human resources, absorptive capacity of the company, firm’s customers and competitors and technology supplies. In-house development strategy enabled the companies utilize the best technology in the market while at the same time enriching their technology which results in flexible decision making. The companies were also able to utilize the resources that would have been used in technology innovation in core technological competencies. Technological purchasing enabled the companies to utilize the best technology in the market while at the same time enriching their technology which results in flexible decision making. The companies were also able to utilize the resources that would have been used in technology innovation in core technological competencies. Collaborative development enabled the firms to benefit from research complementarities though involvement in multiple technological trajectories, research directions that cannot be developed simultaneously (at sufficient speed) in-house and external skills in the exploitation of in-house research activities. Technology acquisition strategies were found to have enabled the firms increase their competitive position in the industry, increase sales, efficiency in distribution of products, market share and reduced costs. The technologies further enhance customer purchase of products creating customer satisfaction and loyalty. The regression analysis established that there was a positive relationship between pharmaceutical firms’ performance and strategies used by the firms to acquire technology they use. The study recommends that firms need to make great efforts towards internal research and development and to enhance their internal knowledge base to maintain technological competence and enjoy long-term competitive advantage.