Competitive Strategies Employed By Selected Branded Software And Hardware Providers In The Information Technology Industry In Nairobi

Abstract

Technology is changing the face of business all over the world. The IT industry has experienced phenomenal growth in the last few years. The growth especially in Kenya has brought its own set of challenges. Information Technology hardware and software firms are faced with challenges of managing a huge number of entrants in to the market and the need to remain relevant and profitable.

Various competitive strategies have been identified by scholars to address challenges in an industry. Some strategies recommend by Michael porter (1998) include Focus, Low cost and differentiation strategies. Other scholars have highlighted strategies like the hybrid strategy, emergent strategies, planned strategies; knowledge based strategies as possible strategies to explorewhen faced with competition.

The study sought to identify what competitive strategies Information Technology Software and hardware providers in Nairobi were" utilizing. At the same the study also sought to identifythe challenges faced in strategy implementation.

53 firms based in Nairobi were targeted with 32 responding representing a 62% response rate. The study was carried out using a questionnaire using the drop and pick method. The study revealed that cost of strategy implementation, high competition levels, and staff costs were majorchallenges. In addition, strategies like setting of warranty centers, high quality customer service,maintaining a good brand image were used heavily in the industry.

Based on the findings it was recommended that a hybrid strategy which takes into account both cost and differentiation strategies be taken into account to maintain competitiveness. This is because cost being a major challenge requires that firms find was of bringing their costs down in their value chain, at the same time there is need to offer superior service to counter threatsfrom firms that undercut on price therefore the need for a hybrid strategy.

Further research is recommended that links existing strategy to performance. Which strategies are likely to lead to higher performance? The Study focused on firms based in Nairobi only, future research can explore other-towns or regions.