Strategy choices by manufacturers in Kenya's Pharmaceutical industry
Njuguna, Anthony M
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Organizations are dependent on the environment for inputs and also for outputs. The environment presents opportunities as well as threats and therefore organizations have to constantly align themselves with the forces in the environment and maintain a strategic fit in order to achieve success. Strategic management enables firms to position themselves in order to efficiently and effectively utilize their resources and capabilities to take advantage of opportunities in the environment and minimize the environmental threats to ensure their survival and growth. Thus firms have to embrace competitive strategy which aims at establishing a profitable and sustainable position against competition in the industry. Therefore, firms in the same industry need to come up with competitive strategies to gain positioning in the market and differentiate themselves from their competitors. The study sought to establish the key strategies formulated by pharmaceutical manufacturers in Kenya and determine the factors which have influenced the choice of strategies adopted. The population of the study was all the Pharmaceutical manufacturing companies registered by the Pharmacy and Poison Board of Kenya as of March 2009. Data was collected through questionnaires, which were distributed through e-mails and drop and pick methods. Secondary data was obtained from literature and used to supplement the data collected. Correlation analysis technique was used to analyze data and interpretation was done with the aid of descriptive statistics which included frequency distribution tables. From the findings, pharmaceutical firms in Kenya have adopted strategies in Cost leadership, Differentiation, Innovation, Execution, Skills, Product quality and Focus which have had positive impact on their market share and profitability. It was observed that majority of the pharmaceutical firms fall between medium and large scale businesses. Therefore it is recommended that it would be prudent for these firms to engage the services of management consultants to ensure that their business strategy is well developed, implemented and reviewed accordingly. Another recommendation is that the companies should come up with more innovative strategies in product and market developments, to enable them attain a competitive edge in the industry. Firms should offer competitive salaries and other incentives to their employees so that they can fully commit their efforts towards growing the business to higher levels. The Pharmacy and Poison Board which is the regulatory agency should invest in better technological equipments and laboratory to ensure that drugs manufactured undergo very stringent quality checks to enhance efficacy. The research had two limitations that may have affected the results of this study, firstly the study was a survey and therefore the researcher used predetermined questions that may have limited the responses and secondly some of the respondents did not answer the questionnaires and these affected the response rate to 76%. With the advent of alternative traditional herbal medicines the researcher recommends a further study to be done to determine their impact on the conventional pharmaceutical products. The same research should also be replicated in other industries in a bid to establish the factors that influence strategy choice in such industries.