Creating and sustaining competitive strategies by Total Kenya Limited in a changing environment

Abstract

The oil industry in Kenya is very dynamic due to very many factors among them the unpredictable fluctuations of oil prices in the international market, volatility in the foreign exchange market and also the unpredictable political environment. As a result, the industry is characterized by intense competition which means that oil companies with competitive advantage survive while those without find it had to operate profitably. These has seen quite a number of multinational oil companies winding up business. Among them include Agip, Mobil, Esso, Caltex and recently Chevron which was bought by TKL. Total Kenya Ltd is a multinational oil company. It was first established in Kenya in 1976 and was known as total oil products limited. Initially when it was established in Kenya, it was owned 100% by Total Outremer from France. In 1985, Total Outremer sold 25% of its shareholding to Kenyan investors and since then, it has continued trading as Total (K) Ltd and as a public company trading its shares at Nairobi stock exchange. The current market price of its shares at Nairobi stock exchange (NSE) is an average of Kshs31. The company markets products like Diesel, Super, Regular, Fuel oil, Ido, LPG, Bitumen and Lubricants. As a result of its deliberate market expansion strategy, it bought off Chevron interests in Kenya and is currently a market leader in the oil business in Kenya with a market share of 36.2%. The findings of the study revealed that the company creates its competitive strategies relevant to respective sections by involving the staff working in those sections and their seniors. First, the main objectives as captured in the vision and mission statement is cascaded downwards from the departments then to the various sections. The overall company objectives of the company include: to market quality

petroleum products, to operate profitably and to give shareholders the highest returns. In a bid to sustain these strategies, my study revealed that the company has adopted various ways to achieve this. Firstly, through the merger between TKL and Chevron, the company became the market leader and significantly increased its profitability. The study also revealed that the company uses market focus strategy by use of its Bon Voyage card to target and lock in customers and sharing of storage facilities to reduce operational costs. The researcher recommends further studies to be done on the extent or impact of strategic responses by TKL on existing strategies so to determine the most cost effective responses that will not ultimately increase the cost of doing business or those that will not necessarily affect the way the company sustains its existing competitive strategies.