Competitive strategy implementation and its effect on performance in large private sector firms in Kenya

Abstract

Business survival is dependent on its competitive strategy and how it is implemented. The goal of every competitive strategy is to achieve sustainable competitive advantage, which is achieved through implementation. There is contention in literature whether to implement single generic strategies exclusively or to combine them. In addition there is an ongoing discussion on whether to adopt win-lose or win-win competition. On the other hand, literature shows that 70 percent of CEOs failure is due to poor execution of strategies while CEOs in East Africa cited competition as their third greatest challenge, after infrastructure. Hence, this thesis is on the competitive strategies implemented by large private sector companies in Kenya and reviews how the generic strategies are implemented with the aim of addressing these apparent concerns.

The research population comprised large private firms, with the sample frame involving the top 300 private companies. Random sampling was used while data was collected using a structured questionnaire which was executed using combined methods of e-mail communication, telephone and face to face interviews. The response rate was 42 percent, representing 59 firms drawn from across service and manufacturing firms in all economic sectors. Tools for data analysis comprised descriptive statistics, factor analysis, t-test, ANOVA, correlation and regression analyses, using SPSS software.

The key findings were that there were three strategic groups of low cost leaders, differentiators and dual strategists in proportions of 1 :3:6 respectively. Dual strategists were found to outperform firms that adopt one strategy exclusively. The study found evidence to support adoption of win-lose competitive posture. It also provides a conceptualisation of the implementation challenge and developed a linear regression model for overcoming it, through use of predictors of implementatation

performance. Firms that use soft and hard implementation armaments together had

higher performance than those that exclusively used either soft or hard implementation armaments. Finally the study provides an omnibus strategy model that may be used to guide managers on prioritisation and implementation of strategies. The findings indicate that the factors that underlie sustainable competitive advantage include adoption of dual strategic advantage and provision of a strategic fit -in the use of soft and hard implementation armaments and the organisational strategic variables.

The study setting revealed an unfavourable business environment, while the respondent firms exhibited exemplary performances. In consideration of the immense contribution by the private sector to the economy, the study recommends that Government policy be appropriately shaped to be responsive to demands from this group for conducive business environment. In addition, managers are encouraged to make readily available the positive predictors of implementation and performance in order to facilitate improved realisation of organisational objectives.

The study experienced constraints on time and finance, though these limitations were trivial and did not affect the quality of the work and its findings in any significant manner. It is suggested that future research be conducted focusing on the strategic target dimension of Porter's (1980) model to determine which position holds in the ongoing discussion on performance of firms 'stuck in the middle'.

performance. Firms that use soft and hard implementation armaments together had

higher performance than those that exclusively used either soft or hard implementation armaments. Finally the study provides an omnibus strategy model that may be used to guide managers on prioritisation and implementation of strategies. The findings indicate that the factors that underlie sustainable competitive advantage include adoption of dual strategic advantage and provision of a strategic fit -in the use of soft and hard implementation armaments and the organisational strategic variables.