Location as a basis of competitive advantage for grain milling firms in Nairobi and Mombasa

Abstract

Businesses worldwide are faced with different kinds of challenges which if not properly handled can lead to the business making losses or even to wind up. It is in this context thus that businesses try to develop strategies and attributes which will enable them become competitive in order to outperform the competition and make higher profits. The aim of this study was to establish if location is used as a basis of competitive advantage by grain milling firms in Nairobi and Mombasa. To this end, this exploratory study was conducted to establish if the locations picked by grain millers to set up their business gives an advantage over businesses located in different locations. The study was a census of the grain milling firms located in Nairobi and Mombasa. Data was collected from a total of 31 firms.

The grain milling firms purposively selected for this study constituted of 19 [61.3%] from Nairobi and 12 [38.7%] from Mombasa. Data was collected using a comprehensive questionnaire which was administered to respondents. The study used both structured and close ended questions. The respondents included different line managers who had different academic qualifications and business experience concerning developing business strategies for the milling firms to enable the business remain competitive and grow to new levels. These included sales, operations and marketing managers. Generally, the findings of this study was that location of a firm was only a competitive advantage if that location was near factors like relevant technology and provided access to a good transportation network. Otherwise, location did not act as basis for competitive advantage. Many respondents stated that factors like brand power and packaging offered a potent strategy for competitive advantage.