Strategic Planning Practices and Competitive Advantage Among Insurance Companies in Kenya

Abstract

In this era of globalization, characterized by rapid transformations across all industries, the operational landscape for organizations has become increasingly unstable and unpredictable. This dynamic environment necessitates the adoption of effective strategic plans that enable companies to successfully navigate change and secure their competitive advantage. This research ascertained the influence of strategic planning on the competitive advantage of insurance companies in Kenya. Three theories guided the researcher: Survival-Based Theory, Porter’s Theory of Competitive Advantage and the Resource-Based View. The researcher employed a descriptive cross-sectional survey design. The research population comprised all the 56 licensed insurance companies with offices in Nairobi City County. Data was gathered through the use of questionnaires. The research data was analyzed by the researcher using SPSS Software version 24. Out of 56 insurance companies in Nairobi, Kenya, 45 responded to a questionnaire, resulting in an 80.3% response rate. The researcher revealed a high R Square value of 0.824, implying that the strategic planning practices elucidated that 82.4% of the variability in competitive advantage. The research further found that while Vision, Mission, and Values are positively correlated with competitive advantage, their impact is not significant. Additionally, the researcher identified a significantly negative connection between competitive advantage and environmental analysis. Conversely, the researcher highlighted that Stakeholder Engagement and Communication have a significantly positive association with competitive edge. The research also found that Risk Management and Monitoring and Evaluation frameworks positively and significantly influence competitive edge. The researcher recommends that insurance firms should refine and more actively integrate Vision, Mission, and Values into their practices to enhance their effectiveness. The researcher further recommends that insurance firms should improve their approach to environmental analysis, ensuring that it is actionable and strategically aligned. It was further recommended that firms should invest in stronger stakeholder relationships, adopt effective communication strategies, refine risk management frameworks, and develop comprehensive M&E practices to leverage their positive impact on competitive edge.