Competitive Strategies Applied by the Retail Sector of the Pharmaceutical Industry in Nairobi

Abstract

This study was conducted with the objective of establishing the competitive strategies being applied by the retail sector of the pharmaceutical industry in Nairobi. Firms develop strategies to help them achieve competitive advantage. These strategies reflect . both external and internal circumstances of a firm. Retail pharmacies in Kenya are faced with various retail challenges. The challenges include customer demands and expectations, government laws and regulations, general economic decline and intra-industry competition. Their survival calls for some form of competitive strategies. In order to gather data from several pharmacies, a cross-sectional survey was carried out. The pharmacies in the population were grouped into four geographical zones to see if there would be any relationship between the strategy chosen and the location of the pharmacy. Stratified sampling was done with the number of pharmacies sampled in each region corresponding to its proportion in the population. In-depth personal interviews were carried out with the aid of a questionnaire comprising both open-ended and closed questions. The data obtained was analyzed using both content analysis and descriptive statistics. .. The results of the study show that retail pharmacies in Nairobi practice strategy formulation although they do it informally. This has enabled them to have various competitive strategies that they are applying in their industry sector. Cost leadership was considered a maj or competitive strategy among retail pharmacies in Nairobi. Differentiation strategies mainly involved service delivery. Customer service was considered the most important factor in attracting and maintaining customers. These retail pharmacies face several challenges. These challenges include unethical competition, large number of brands in the market, undercutting on prices, dispensing medical practitioners, well as insecurity and high personnel costs. This study was limited to 35 pharmacies out of 362 in Nairobi. A study involving more pharmacies may give results that could be generalized more accurately.