Response Strategies to Changes in the International Business Environment Adopted by Research-based Multinational Pharmaceutical Companies in Kenya

Abstract

Faced with the reality of competing in a global environment while having to act in a local environment, Multinational Company (MNC) subsidiaries create competitive advantage through response strategies that adapt to both the changes in their international environment and their national environment. A survey was carried on all the researchbased multinational pharmaceutical company subsidiaries in Kenya to establish the changes that have occurred in the international business environment, their impact on their businesses and the response strategies that they have adopted to cope with these changes. The instrument for data collection was a questionnaire, which consisted of structured and semi-structured questions. Data was collected from a total of ten (10) companies, which constituted the population of companies targeted for the survey as per the inclusion criteria. The study findings suggest that changes have occurred in the international business environment of the multinational pharmaceutical companies (MNPCs). The ratings for changes in the global industry environment and the macroenvironment were higher than those for changes related to globalisation of the industry. The results further suggest that these changes in the international business environment have had an impact on various aspects of the businesses of the MNPC subsidiaries in Kenya. These changes appear to have had the greatest impact on activities related to marketing and sales and the least impact on the research and development activities of these subsidiaries. The research findings further established that the research based MNPC subsidiaries in Kenya have adopted a range of response strategies to these changes which when ranked in descending order of mean score, were related to the marketing and sales function; stakeholder engagement activities; approach to business; and international business. From the results of this study, it can be concluded that the changes in the international business environment have impacted on the business of the research-based multinational pharmaceutical company subsidiaries in Kenya. These changes have in turn led to the adoption of a range of response strategies by these subsidiaries. These response strategies appear to be guided by the pressure for local responsiveness vis-à-vis the pressure for global integration; and the corporate context which is dictated by their headquarter offices.