Value Chain and competitive advantage of firms in the Information Technology Industry in Kenya

Abstract

The Information Technology industry in Kenya is highly competitive and in their desire to remain competitive, the information technology firms need to critically review value adding processes to eliminate unwanted costs in the industry and consequently stay competitive. The study sought to establish the relationship between value chain and competitive advantage of firms in the information technology industry in Kenya. A cross section survey was used in this study. The target population was the fifteen information technology firms. The study used census sampling technique while data collection was done using questionnaires. Data was analyzed using descriptive statistics and inferential statistics (correlation and linear regression). From the study findings, the study concluded that the information technology industry has strong competition thus the information technology firms in Kenya adopts various value chain activities to gain a competitive advantage in the industry. The quality and lead time were the most significant aspects of competitive strategies adopted by information technology firms in Kenya. The information technology firms in Kenya were established for profitability, growth (gain Market share) and survival in market respectively. On practicing of inbound logistics as a value chain activity, the study concluded that the process system of receiving inputs is capable of detecting counterfeits and poor quality inputs and that inputs are well serialized respectively. On practicing operations as a value chain activity the study concluded that operations conduct checks to ensure all operations conform to required quality management systems (QMS), operations transform goods into finished products in timely manner and that operations is able to take corrective actions on faulty goods beforehand respectively. On out bound logistics as a value chain activity, the research concluded that out bound logistics has an appropriate and secure system of storing its work in progress goods. On the practice of marketing and sales as a value chain activity, the research concluded that marketing and sales as a value chain activity has the capacity to identify the markets demand and that it attaches importance to having an advertising strategy respectively. From the correlation analysis the study concluded that there is a correlation between the value chain activities and the competitive advantage with marketing and sales having the highest value and infrastructure having the lowest correlation value. From the regression equation, the study concluded that marketing and sales contribute most to the competitive advantage followed by out bound logistics.