Growth strategies adopted by private hospitals in Nairobi

Abstract

Growth strategies are indispensable to the survival of private hospitals in Nairobi. These hospitals invest their resources in growth strategies aimed at helping them deal with organizational challenges of the 21st century. This study was focussed on establishing the growth strategies that have been applied by private hospitals in Nairobi and also the factors that influence the choice of these growth strategies. The data was collected through a well-structured questionnaire targeting the top management of the private hospitals who are responsible for crafting and implementing strategies. The data was analysed and summarized in frequency distribution tables and various percentages, means and standard deviations were computed. The findings indicated that the most utilized growth strategy was product development whereby most hospitals were committed in improving the quality of services and incorporating new features into the existing products. The study also revealed that private hospitals in Nairobi used market development, market penetration and diversification strategies. In addition, mergers and acquisition were used by the hospitals but to a small extent. The findings on factors influencing the choice of growth strategies indicated that the most important factor affecting choice of growth strategies was the availability of resources. Also, vision and mission of the institution of the hospitals were ranked as the second important factor in influencing choice of growth strategies. Other factors that were considered important included customer needs, competition, goals and objectives, the business environment, shareholders influence, expected profits and economic stability. The study encountered the limitations of respondents being very busy in their work schedules and this resulted into delays in returning the questionnaires. The researcher had to do a lot of follow-ups. Also, some respondents declined to provide information citing that growth strategies were a sensitive issue that could be used by their competitors. In view of the findings of the study, the researcher recommended that Private hospitals in Nairobi should allocate more resources to research and development in order to continually improve on the quality of their products also focus more on diversification strategies that would enable them to increase their revenue base. In addition, the private hospitals in Nairobi should venture into markets outside the country and tap on the customer base in the entire African market