Value chain analysis and competitive advantage at Mayfair Group of Companies in Kenya
The new landscape in business today is characterized by a turbulent environment that is dynamic and competitive. Firms of the 21st Century are faced with challenges as a result of hyper competition, technological revolution and globalization. Business owners and managers are at pains in finding solutions to keep their organization effective and efficient. Therefore, there is need for firms to develop strategies that would foster sustainable competitive advantage over rival firms. In analyzing potential business opportunities and sources of competitive advantage within an organization, Porter introduces the value chain framework as a strategic tool for doing so. The Mayfair Group of Companies is licensed under gaming industry to operate in Kenya and Uganda providing services in public gaming/casino sector. The group is operating in a volatile and intensive –competitive sector hence, the need to understand how to manage its value chain activities better than rival companies to achieve competitive advantage. The study sought to determine how value chain affects competitive advantage at Mayfair Group of Companies. To achieve this objective, a case study design was used and qualitative primary data was collected utilizing an interview guide as the instrument for data collection. A total of sixteen (16) informers comprising of senior managers, middle level managers and supervisors were interviewed. Secondary data was employed through review of publications, reports and websites and the data was analyzed using content analysis. From the research findings, the study concluded that Mayfair Group is utilizing differentiation to position itself in the market and the strategies employed to achieve above-average performance are differentiation and niche strategies. The configuration of the business activities in the value chain to enhance competitive advantage exist. Value creation and cost advantage is attained through good reputation, professional and experienced managers, trained and experienced gaming staff, multiple games for customers, loyal and repeat customer base, assets and central administration and procurement systems. The recommendations made suggested that Mayfair Group needs to critically analyze its cost drivers along the business activities and to develop or strengthen products that are valuable, rare and costly to imitate by the competitors and thus, strengthening their position as a differentiator and attain sustainable competitive advantage. An Economic Order Quantity system can be acquired to improve the processes for the procurement department. The Human resource should be involved in decision–making so as to encourage the staff to take up competitive advantage as their responsibility and the management to address how they can appreciate, develop and motivate all the staff. The management should incorporate a marketing and sales department that will be charged with marketing research, product development, brand building, advertising and public relations thus increasing the customer base and the profits margins. The over reliance on repeat customer base and good will are not good enough resources for sustainable competitive advantage. Instead they are likely to be sources for competitive parity and failure to invest in them can eventually create a competitive disadvantage. The study recommends further studies using Hines Value Chain Concept that proposes a customer focus value chain approach, and one to determine how value chain affects competitive advantage in the casino sector.