Strategies employed by Cadbury Kenya Limited to gain sustainable competitive Advantage

Abstract

An organization's success is environment depended. Organization functions within the environment. The environment offers opportunities and poses threats to an organization depending on the capabilities of the organization. For an organization to survive it has to pay keen attention to its environment. Thomson et al (2010) posits that a company's competitive strategy deals exclusively with the specifics of management plan for competing successfully. Barney and Hesterly (2008), posits that the ultimate objective of the strategic management process is to enable a firm to choose and implement a strategy that generates a competitive advantage. In general, a firm has a competitive advantage when it is able to create more economic value than rivals. The study set out to address two objectives namely to establish the strategies CKL had used to create sustainable competitive advantage and to establish the challenges CKL faced in pursuit of creating sustainable advantage. This study made use of both primary and secondary data. Primary data was collected through in-depth interviews with the senior management at CKL. Secondary data was obtained from the company's records such as financial statements and in-house magazines and publications. A content analysis was performed on the data to allow for an in-depth understanding of issues in the case. The study found out that CKL had periodic strategic plans. The review period was found to be every 5 years. Strategies are normally developed by the global corporate company - Mondelez International, cascaded into a local strategy and implemented based on the local setup. The study established there had been many changes in the external environment variables though CKL was able to respond to most of them. In the political framework the company faced various challenges prior to the 2007 and 2013 elections because the environment was harsh in doing business. In the legal environment, the key variable had been taxation. In the technological environment, the key changes were due to innovation which was mainly driven internally by the global company. This led to development of Centers for Excellence for specific manufacturing for affordability of the technology, economies of scale and for better value creation. Economic factors which affected CKL include reduced capital outlay, high interest rates and high cost of electricity. In the competitive environment, key variables were the barrier of entry is high, bargaining power of suppliers and buyers fairly very low and availability of cheap raw materials from China, Asia and some local companies. The study suggested that in order to understand strategies possible for these environmental changes, further studies are required in other companies in the industry to get a holistic view. A further study could be canied out to gain a full understanding why CKL chose these strategies and to establish if there are other strategies CKL could have used. Lastly, further studies could be done to establish how CKL can alter these strategies so as to respond to the imminent environmental changes in future. This study concludes that, even for companies that were successful, it is prudent that they continuously engage in strategies that are aligned and match with the changes in the external environment to create sustainable competitive advantage. Organizations also need to selfishly guard its core competencies and unique resources to be able to create a sustainable competitive advantage.