Organizational Strategy And Growth Of Microinsurance In Kenya

Abstract

Organizational strategies are especially significant in businesses where the services or goods offered are comparable and in case where competitive rivalry is intense. Firms that desire to achieve and retain a significant market share must be profitable and be able to scale their operations through adoption of competitive strategies. This study sought to establish the influence of organizational strategies on growth of micro insurance companies in Kenya. The study was anchored on Resource-Based View Theory and Porter’s generic model of competitive strategies. A descriptive cross-sectional survey was used in this investigation. The target population in this study consisted of thirteen (13) insurance companies that offer micro insurance products in Kenya, headquartered in Nairobi. The unit of analysis included 60 employees working in the microinsurance companies at senior levels of management. The study used the census data collection method. The main technique for gathering data was a questionnaire. Open-ended, structured questionnaires were used to gather the data. Descriptive statistics was utilized in data analysis. SPSS version 23 was used for data analysis which offered varied ways of analyzing data to meaningful inferences. Correlation inferential analysis was employed to measure the degree of association between dependent and the indicators of the independent variables. Quantitative reports were generated using tabulations, percentages, and measures of central tendency (means and standard deviations). The study established that by lowering the cost of operations, micro insurance companies in Kenya were able to offer products at a lower price. Differentiation strategy offered competitive advantage to the firms enabling them to provide customers with unique products that were different and distinct from that of competition. Focus strategy helped insurance companies to identify the market segments where they can compete successfully. Moreover, through the power of innovation, microinsurance companies can accelerate the pace of company change. The study concludes that cost leadership strategy, differentiation strategy, focus strategy and innovation strategy all have a positive significant effect on micro insurance growth in Kenya. The study recommends the strategic management of micro insurance firms to consider embracing these organizational strategies since they were found to be critical in fostering organizational competitiveness and growth of micro-insurance.