The influence of competitive strategies on competitiveness of local pharmaceutical manufacturing firms in Kenya

A thesis submitted to Strathmore Business School, Strathmore University in partial fulfilment of the requirements for the Degree of Masters of Business AdministrationThe local pharmaceutical manufacturing firms play an important role in the economic development of Kenya as they create employment opportunities but more so they create products that are critical in life support services. Therefore improving the competitiveness of the local pharmaceutical manufacturing firms in Kenya is critical for the realization of Kenya’s Vision 2030. This study examined the influence of competitive strategies on competitiveness of local pharmaceutical manufacturing firms in Kenya. The Resource Based View and Porter’s Generic Model guided the study. Quantitative approach was used in this study. Cross-Sectional survey design used to examine the influence of competitive strategies on competitiveness of the local pharmaceutical manufacturing firms in Kenya. A questionnaire was to collect primary data from the local pharmaceutical-manufacturing firms. The study found out that competitive strategies and firm competitiveness had a positive Pearson Correlation Co-efficient. The relationship between these two variables is relatively a strong positive relationship meaning an increase in one variable is significantly likely to result in an increase in the other variable. The study established that all the three competitive strategies; differentiation strategy (β= .28, p value=.000), cost leadership strategy (β=0338, p value=.000) and focus strategy (β.206, p value=.000) had significant coefficients to model a regression equation. However, cost leadership strategy had a higher coefficient of determination meaning that, it had the greatest effect on firm performance. The R-square values revealed a strong relationship between the firm competitiveness and the competitive strategies; differentiation strategy, cost leadership strategy and focus strategy. This study recommends that local pharmaceutical manufacturing firms adopt cost leadership strategy since it has the most significant influence on firm competitiveness among the three competitive strategies that were tested in this study. The empirical evidence from this study infers that cost leadership has significant influence on competitiveness of local pharmaceutical manufacturing firms. It is suggested that future research may consider expanding the scope to include firms in other geographical regions to confirm the findings of this study and establish whether there is significant difference in strategies employed by these firms based on their geographical scope