| dc.description.abstract | The basis for crafting competitive strategies is the understanding of the forces that
shape competition in a particular industry. The most widely used framework to
understand the competitive forces is based on Porter’s Five-Force model. The model
provides an assessment of the contending forces that shape competition in the industry
and determine firm strategy. Using the model, this study was designed to determine
the applicability of Porter’s Five Forces Model applicable in Kenya’s handicrafts
industry. Using a semi-structured questionnaire, data were gathered from Chief
Executive Officers, Corporate Strategy Managers and/or Marketing Managers of the
sampled handicrafts companies and statistically analyzed using percentages,
frequencies, mean scores, and standard deviations. The major findings of the study
were that out of the six forces (Porter’s five competitive forces and government
policies) that were used in the study, five forces were highly rated as shaping
competition in the industry. These forces include rivalry among existing companies in
the industry, bargaining power of both buyers and suppliers, threat of substitutes, and
government policies. It was established all the factors which were used to determine
the competitive strength of each force were moderately rated on aggregated terms
with mean scores ranging between 3.00 and 3.99. The threat of new entrants was the
only force which was found to be insignificant in shaping competition in the industry.
The study established there were a number of entry barriers which make it impossible
for new entrants to invest in the industry, hence don’t affect the competition in the
industry. The overall conclusion that could be drawn from the findings of this study
was that Porter’s (1980) Five Force Model was found to be highly applicable in the
handicrafts industry while government was considered as a separate contending force. | en |
