Competitive Strategies of Health Management Organizations (HMOs) in Kenya
A basic premise of strategy is that superior profits occur when a corporation secures favourable positions in attractive industries, and pursues economies of scope across business units. Business strategies underlie decisions about business policies, operations, practices, technology investments and on and on. They are about choices such as who will be your target customers, what products or services to offer them and how you will do it. The key to formulating a strategy is to give an organisation a competitive advantage-something that sets it apart and gives it a competitive edge. A winning competitive strategy is founded on consistently understanding and predicting changing market conditions and customer needs and out performing your competitors in serving those needs. From literature review we learn that competitive strategy is concerned with a fir’s position relative to its competitors in the market it has chosen. It seeks a competitive edge over rivals while slowing down the erosion of present advantages. In times of intense competition for market and wallet share, competitive strategies distinguish winners from also-rans and losers. This research sought to find out the competitive strategies adopted by Health Management organizations (HMOs) in Kenya. It examined the strategies that have been deployed; the extent of application and the degree of success of each strategy in enabling the organizations achieve competitive advantage. The study used a census survey using a structured questionnaire. All the 15 HMOs based in Nairobi were considered for the survey. However only 11 questionnaires were received and analyzed. The response rate was considered adequate for the purpose of the research. The findings indicate that HMOs have various strategies in place which they have employed with varying degrees of success. There appears to be an inconsistency between the extent to which some strategies are applied and the rate of success of those strategies. There are strategies that are extensively used but success rate is low and vice versa. The study recommends that HMOs should raise their competitive strategies to a higher level through industry analysis, competitive analysis and competitive intelligence. As positions of superiority and the resulting market share are continuously subjected to erosion by competitor moves and changes in the market, the study further recommends that HMOs should be flexible and be ready to adjust their strategies to suit the changing times.