Competitive Strategies For Enterprise Growth Adopted By Incubator Companies At Nairobi Garage, Nairobi County, Kenya

Abstract

Currently, there is renewed interest in incubation as a framework for facilitating start-ups. Potential entrepreneurs consider it a viable option for support while venture investors see it as an avenue to diversify risky investment portfolios. Anchored on the Porter’s Five Forces Model and Resource-Based Theory; this study’s objective was to investigate the competitive strategies for enterprise growth used by incubator companies at Nairobi Garage, Nairobi County, Kenya. The study employed cross-sectional survey perspective that is both quantitative and qualitative in nature. This study focused on the for-profit incubator companies at Nairobi Garage. The sampling frame comprised of all for-profit incubator firms in Nairobi garage. The for-profit incubator companies at Nairobi Garage were classified based on the sector characteristics of information technology, service and trading, to ensure good representation. 30 respondents formed the sample of the study which is 34.88% of the population. Primary data was gathered using a structured questionnaire with open-ended as well as closed questions to achieve the research objective. Data from the study was analyzed both quantitatively and qualitatively. It was established that many of the business incubator firms were providing services and products falling in three categories: Information and communication technology, service and trading. The respondents agreed that competitive rivalry is one of the factors that determine intensity of competition (M=4.05, SD=0.71842). The other factors include: bargaining power of buyers (M=3.938, SD=.68636), bargaining power of suppliers (M=3.725, SD=.70732), threat of new entrants (M=4.093, SD=.68906) and existence of substitute goods/services (M=4.013, SD=.77186). From the findings, the respondents suggested that the incubator companies used cost leadership strategy to a large extent (M=3.8313, SD=0.6948). The incubator companies also adopted differentiation and focus strategies to a large extent as illustrated by the mean of 4.0188 and 3.9687 in that order. It is the recommendation of the study therefore that incubator companies ought to invest most in, as well as adopt cost leadership mechanisms particularly the formation of forming linkages with service providers. To gain competitive edge over rivals in the sector and to ensure the long-term viability and sustainability, the management of incubator companies should emphasize and enhance investments in organizational differentiation strategies. To attain this, it is important that incubator companies differentiate their operations, products and services from an informed knowledge perspective.