Competitive strategies applied by cement manufacturing firms in Kenya

Abstract

The research focus is about competitive strategies applied by cement manufacturing firms in Kenya. The only three registered cement-manufacturing firms by Nairobi Stock Exchange currently are; Bamburi cement. East African Portland cement and Athi-River mining. The objective of the study is to determine competitive strategies applied by cement manufacturing firms in Kenya. Secondly, to determine the factors that influenced the choice of a particular strategy employed by the respective firms. The study took on a case study design aimed at gathering qualitative data. An in depth analysis was done by interviewing several top managers using an interview guide. 1 used drop and pick interview guide to collect data. The response rate was okay because a case study only needs few people to provide information. They did this in all the three companies I went. Some companies provided me with secondary data, in case they were sceptical about the questions on the interview guide. From the findings the following are some of the strategies the three cement firms adopted. For instance, the Bamburi cement company has adopted competitive strategies inorder to maintain their vision. Their vision is maintaining its market leadership position, product quality and brand building. To achieve their vision Bamburi cement are innovative in their product brand choice as a competitive strategy. They also used recent technology in cement manufacture which is cost effective. As concerns the second company EAPC, the vision for competitive strategies adopted is to produce quality cement, which can challenge competition in the market. The target of EAPC is to be a leading and preferred cement producer in East African region. They have established Depot sales offices all over the East African region including; neighbouring countries like Rwanda and Sudan. EAPC ordinary Blue Triangle cement is cheap compared to Bamburi's equivalent brand Nguvu. It is the most preferred cement in the region because of its low cost price. Hence use of low cost strategy is seen to work with EAPC competing other brands for Bamburi and ARM in the East Africa region. Finally, ARM has adopted a competitive strategy which has made it remain an innovative natural resource based mining and processing company in Kenya. ARM has used capacity expansion strategies and focussed strategy to have it Rhino Cement brands compete well with Bamburi's Nguvu and Portland Blue Triangle cement domestically in Kenya. So far, ARM's Rhino brand is the cheapest in the region, because of adopting capacity expansion strategies, focussed and low cost strategy to penetrate the local Kenyan market. The reason which made the leading cement firms like Bamburi to be the market leader in cement manufacturing business in Kenya, mainly depended on the following factors namely; innovation on the product and technical manufacturing process of cement (good internal resource capabilities), efficient leadership of the management team to craft and evaluate the strategies for maintaining competitive advantage. Adhoc strategies were crafted to be pursued from time to time as need arises to curtail turbulence in the business environment.