Strategic Responses To Changing Environment By Kenya Electricity Generating Company

Abstract

In recent years, organizations are operating in unpredictable environment. Coupled with technological advancement, globalization and dynamic changes, these have called on organizations to review their survival strategies. Every company must be willing and ready to modify its strategy in response to changing conditions, advancing technology, and the fresh moves of competitors. This study aimed to investigate strategic responses employed by Kenya Electricity Generating Company (KenGen) to the changing environment. The specific objectives were to identify the challenges faced by KenGen from the environmental changes in which it is operating and the strategic responses adopted by KenGen to the changing environment. This study employed the case study method. The researcher used primary data. An interview guide with open-ended questions was administered to 8 managers at KenGen as the respondents who included the human resource, business development, strategy and business performance, regulatory and corporate affairs, supply chain, operations, finance and ICT, company secretary and legal affairs. The qualitative data collected was analyzed using content analysis technique. The study found that KenGen has adopted a number of strategies which include rebranding, innovations and diversification. The findings indicated that challenges that face the company include low investment in the power sector by private investors, high cost of rural electrification, limited distribution capacity, limited capacity during peak demand, grid-system losses and weaknesses, limited reach in rural areas, vandalism, over-reliance on hydro power which constitutes about 70-80 per cent of the total electrical power forcing the company to do power rationing in times of drought, and also switching to alternative power generation which is very expensive. The study recommends that the management should look for alternative sources of funding in order to overcome the challenges of finance related to restructuring strategy, economic recession and liquidity and solvency.