Strategies Adopted to Enhance Competitive Advantage Within Liberalized Markets by Commercial State Corporations in Kenya

Abstract

State corporations have been facing immense challenges since independency due to inefficiency and ineffectiveness. It is against this backdrop that the government of Kenya started the process of privatizing some slate corporations to enhance their competitiveness. The purpose of the study was to investigate the strategies adopted by commercial state corporations to increase their competitive advantage within a liberalized market in Kenya. A descriptive survey research was used to answer the research questions on the current status of the subject of the study and in reference to the objectives of the study. The target population of the study was all the commercial state Corporations in Kenya totaling fifty three (53). A sample of 34 commercial state corporations was taken out of this sampling frame. Questionnaires were used to collect primary data from the respondents. The data was quantitatively and qualitatively analyzed and presented as frequency and percentage tables. The study found out that commercial state corporations have adopted various strategies to position themselves in the market. This has been necessitated by the dynamic nature of the liberalized market. The study focused on: cost leadership strategy; differentiation strategy; focus cost strategy; focus differentiation strategy; and hybrid strategy. According to the study, the extent of adoption and impact of these strategies varies from one corporation to another with 64.3% adopting cost leadership as a key competitive strategy. The regression analysis conducted revealed that various strategies adopted by the commercial state corporations have had a significant impact on their competitive advantage over the last ten years a indicated by the high coefficient of multiple regression (0.833). This postulates that; 83.3% of the competitive advantages of the state corporations can be attributed to the competitive strategies adopted by the state corporations. The study found out that, Hybrid strategy has the highest impact on the competitiveness of the state corporations with a correlation coefficient of 0.845 followed by Focus Cost strategy (0.828), while Cost leadership has the lowest impact on the competitive advantage of the state corporations with a correlation coefficient of 0.539. Opportunities identified in this research were; the need for state corporations to increase their level of diversification to lower risks, improve on capacity building through investments in staff training and innovation.