Relationship between strategic planning and competitive advantage in the export processing zones in Kenya

Abstract

Over the past three decades export processing zones (EPZ) have become popular instruments of trade policy, offering firms located in them free trade conditions and a liberal regulatory environment. Past published research studies in strategic planning are found in the rich and industrialized countries. There is virtually no published data on strategic planning research in the EPZ. This study aims to fill this knowledge gap. This study determines the strategic planning practices in the EPZ firms in Kenya. The study then examines the relationship between strategic planning and competitive advantage in the EPZ firms in Kenya from a resource perspective. In the literature positive relationships between planning and performance have been found in rich industrialized nations. The findings of this study suggest that strategic planning is not widely practiced in the EPZ firms in Kenya. Firms that were widely involved in formal strategic planning had above industry

average profits compared to those which were not. There was a significant difference in strategic planning and profitability between these firms. The results also show that the relationship between strategic planning and profitability was found to be significantly greater in firms where strategic planning is widely disseminated compared to those, which were not. The researcher suggests further research in areas such as operationalising strategic planning, the relationship between resource allocation in strategic planning and success and the relationship on participation and effectiveness in strategic planning in the EPZ firms