The role of intangible assets in sustaining competitive advantage among the Kenyan pharmaceutical manufacturers

Abstract

Sustaining a competitive advantage is imperative for fums that are in dynamic industries, which require effective strategic implementation to manage such changing situations. The pharmaceutical company, which is a business that competes in the knowledge economy for discovering and commercializing therapeutic agents, must continually develop strategies to protect its intellectual capital and improve performance. In order to sustain competitive advantage, pharmaceutical manufacturers operate on the basis of their intangible assets. The study sought to examine how, in the framework of resource-based view of the firm, Kenyan pharmaceutical manufacturers use intangible assets to build organizational capability to sustain competitive advantage and to determine the challenges facing intangible assets' potential as sources of sustainable competitive advantage among them. As a research setting, the study comprised of all pharmaceutical manufacturers situated in Nairobi. The respondents were asked to indicate, from a list of intangible assets, roles and challenges, the extent of use, role played and challenges faced by their firms. The result of the study showed majority of the respondents felt that intangible assets had a ,significant role in sustaining pharmaceutical manufacturers' competitive advantage. Findings suggest a strong usage of intangible assets among the firms with over 50% of the firms reporting a great extent use of company reputation, brand reputation, customer service reputation, human resource management policies and patents. The result also showed that intangible assets played significant role in enabling customers to easily recognize firm's product as well as being source of revenue through franchising. Proliferation of counterfeit products was cited by majority of the respondents as the greatest challenge facing the pharmaceutical manufacturers with generics and weak property law cited as significant threats.