A Survey of the Perceived Attractiveness in the Freight Forwarding Industry: an Application of Porter's Modified Framework

Abstract

The main objective of this study was to access the perceived attractiveness in the freight forwarding industry. The research sought to find out the level of attractiveness in Nairobi. This study was greatly motivated by the fact that the freight forwarding industry in Kenya has not been considered as a serious business sector and was mainly associated with individual players known as "briefcase agents", yet this is an important industry that has experienced continued entry and exit, therefore the research sought to find out the real reason behind the perceived attraction into the industry. Questionnaires were administered to operations manager of the vanous freightforwarding firms. Out of total of 70 freight forwarding firms that composed the total sample 39 responded, representing a response rate of 56%. Data collected was presented using tables and analyzed usmg descriptive statistics. Proportions, percentages were used for data analysis. The major findings were that the freight forwarding industry operates within the SIX competitive forces that affect the industry profitab-il.ity and thus determining its attractiveness, these forces entry of new competitors, the threat of substitutes, the bargaining power of buyers, bargaining power of suppliers, government and rivalry among the existing competitors are embodied within the industry and each plays a major role. The collective strength of these six competitive forces determines the ability of firms within the freight forwarding industry to earn return on the capital invested General conclusion is that even though attractiveness is relative, not absolute, it is always generally appraised from the standpoint of a particular company . A company with perceptive understanding of industry key success factors can gain sustainable competitive advantage by training its strategy on industry key success factors and devoting its energies to being better than rivals on one or more of these factors. Recommendations made were to create ways in which the delayance of clearance of cargo can be limited and various documentation reduce to fewer, educate the public more on the freight forwarding business and lastly automation of this sector should be greatly encouraged to greatly enhance the efficiency in this sector.