Strategies adopted by multinational pharmaceutical firms in Kenya to respond to competitive rivalry in the pharmaceutical industry
Today‘s business environment requires firms to embed in relationships with other actors in order to gain access to resources needed. In order to be successful, organizations must be strategically aware. They must understand how changes in their competitive environment are unfolding. They should actively look for opportunities to exploit their strategic abilities, adapt and seek improvements in every area of the business, building on awareness and understanding of current strategies and successes. Organizations must be able to act quickly in response to opportunities and barriers. Organizations have to be able to respond effectively to challenges, both problems and opportunities as they arise. In response, organizations should work towards an outward-focused view of the way services should be provided, a fundamental shift from the traditional focus on internal concerns. At the same time, major opportunities for improvement may arise from developments such as competitive environment, the changing taste of consumers and the availability of additional financial resources. The objective of the study was to determine the strategies adopted by multinational pharmaceutical firms in Kenya to respond to competitive rivalry in the pharmaceutical industry. The research design adopted was cross sectional survey. The population of the study comprised of all the 25 multinational pharmaceutical firms operating in Kenya and thus the study was census. The study used primary data which was collected using a questionnaire. The data was analyzed using descriptive statistics. The study found that the firms responded to competitive rivalry in the industry by adopting niche marketing, low cost and differentiation strategies. Adoption of these strategies was based on identification of customer needs in order to create customer loyalty, offer differentiated products that suit customer needs, undertake aggressive advertisement and promotion, undertake market research, analyze competitors‘ costs, before fixing prices and establishing relationship marketing. Other strategies used include ensuring resources match growth in the need for products, offering affordable and competitive products in all regions in the country, development of diversified products so as to realize brand loyalty, offering low cost products in comparison to competitors thus leading to improvement in market share, possession of detailed knowledge and customer needs, continuous product improvement and innovation, partnering with customers to produce highly customized products, increasing advertising funds from one year to another than competitor and unique characteristics that differentiates the company from competitors. The study concluded that the competition in the pharmaceutical industry has resulted in the multinational companies adopting different strategies that include differentiation, niche marketing, and low cost strategy in order to compete effectively. The study recommends that the multinational firm should inculcate a practice of continuous review of the state of competition in the industry, implement processes to identify customer needs, produce innovative products, have a good marketing budget, consider product pricing and adopt strategies that will ensure achieving competitive advantage.