Relationship between dynamic capabilities and opportunity exploitation by petroleum importing and marketing companies in Kenya
High demand of petroleum products, price volatility, increased competion and stringent regulatory requirements bring market dynamism in the petroleum industry and require quick responses in matching the firm’s resource and capability portfolio with environmental opportunities.Petroleum importing and marketing firms in Kenya due to the dynamic environment in the industry, need to integrate, build, structure and reconfigure internal and external competences by generating multiple sustained competitive capabilities simultaniously with the changing, government regulations, demand levels and consumer perception international price levels.The objectives of this study were to determine the dynamic capabillities developed by the petroleum importing and marketing companies in Kenya; to establish the relationship between the dynamic capabilities and opportunity exploitation by the petroleum importing and marketing companies.Data was collected through questionnaires from a population of 42 Petroleum marketing and importing companies and was analyzed quantitatively. The findings of the study indicate that organizational skills & resources, process integration and financial position satisfactorily contributed to exploitation of existing opportunities. While, Knowledge creation process, technology, integrative strategies, scenario process, collaboration network, leveraging capability, contribution were above average in opportunity exploitation contribution. Organization reengineering, external integration of capabilities and linkage with external firms were just averagely contributing to exploitation existing opportunities. The dynamic capability activities that most petroleum importing and marketing companies greatly implemented were, integrating resources, leveraging knowledge, Market positioning, Networking and information gathering. The study concluded that the petroleum importing and marketing companies had knowledge, resources and capability transformation, market analysis and opportunity identification and seizing capabilities which contributed to opportunity exploitation. The capabilities are related to opportunity exploitation but high dynamic capability level did not measure directly to opportunity exploitation. The critical challenges that hindered satisfactory contribution to exploitation of opportunity were; scanning the environment for opportunities and threats, resource allocation, knowledge sharing, reconfiguring resources, exploiting opportunity, adaptation to competitive environment and market analysis. It is recommended that while considering factors for dynamic capability development; the actors, strength, weakness, opportunities and threats, existing skills, process and structure, core competence and capabilities, adaptation to competitive environment and the opportunities should be given high priority. To enable achievement the level of capability required to have a leveraged competitive advantage as the petroleum companies exploit the opportunities in the dynamic market.