The application of porter's generic business strategies and performance of pharmaceutical wholesalers in Kenya

Abstract

This project has examined the application of Porter’s generic business strategies by Pharmaceutical wholesalers in Kenya and how these strategies have impacted firm’s performance. By examining these strategies, this project has established the relationship between strategy adopted and the firm’s performance and also identified some of the challenges faced while pursuing Porter’s generic strategies. A descriptive cross sectional survey was undertaken. The population of the study consisted of all registered Multinational Pharmaceutical wholesalers in Kenya, whose number stood at 40 as at July, 2012. A semi-structured questionnaire was used to collect primary data from the respondents. From the findings, to a great extent differentiation strategy and focus strategy were the main strategies used by Multinational pharmaceutical firms in Kenya. On overall performance majority of the firms were in the category of 41 to 60% rate. Respondents in the study strongly attributed their firm’s performance to the strategies adopted thus suggesting that pursuit of one generic business strategy as suggested by Porter, places a firm in a better strategic position and results in superior performance rather than a situation where the firm is “stuck in the middle”. Further research to establish factors that lead to change in firms’ competitive strategies within the pharmaceutical industry in Kenya is recommended. It is also recommended that Multinational pharmaceutical wholesalers should not try to compete with Asian and local pharmaceutical firms on price, instead they need to market their drugs as aspirational products for the uppermost earners.