Building competitive advantage through diversification: a case study Of the KENOL/KOBIL oil corporation

Abstract

This was a case study on building competitive advantage through geographic diversification. The study was done as a case study of Kenol/Kobil Petroleum Company in Kenya. The data collection instrument was an interview guide. Secondary data was also collected. The geographic diversification strategy pursued by Kenol/Kobil in general has enabled the company to expand to five other countries in the region apart from internal expansion in Kenya. Even within the country, the country has adopted the same strategy. This strategy is backed by acquisition strategy as an entry strategy into a new market. It is evident that this strategy would not succeed without professional and financial backup. The company has adopted what in their term is called trading strategy where the company has diversified into various fields to enable it raise funds to support their expansions geographically. In conclusion, the objective of the study was to determine whether Kenol/Kobil has attained competitive advantage through geographic diversification, the factors used by KenollKobil in pursuit of its geographic diversification strategy, and the factors considered by Kenol/Kobil in selecting geographic areas to diversify into. All the three objectives the study were achieved. It is evident from the study that Kenol/Kobil has been able to increase its market share both locally and regionally through acquisitions of rival companies. In Kenya, it has increased its market share to 20%. It has also acquired Shell in Rwanda and is successful in Tanzania. The factors considered by the company in diversifying include the possibility of dominating and the state of competition in those areas. It also considers financial capabilities of the company in rneejinq the objectives it has set for itself.