Strategic collaboration among the retail Supermarkets in Nairobi Kenya

Abstract

The aim of the research was to establish the extent of strategic collaborations among the retail supermarket in Nairobi, Kenya, the factors that influence these collaborations and the benefits of engaging in strategic collaborations. A sample of 63 supermarkets was chosen from the list of 134 supermarkets. Structured questionnaires were administered through drop and pick later method. The response rate was about 63% that is 40 out of 63 questionnaires were returned dully filled. Global competition takes place even in ‘local’ businesses; partnerships have become central to competitive success in the fast changing Global markets. Many of the skills and resources essential for the future prosperity of a company lie outside the firm’s boundaries and outside management’s direct control hence strategic partnerships are not an option but a necessity (Doz and Hamel 1998).The findings indicate that collaboration was practised among the retail super markets and to a large extent with suppliers and the large supermarkets. These collaborations were mainly influenced by the need for market power, mutual benefit, source of competitive advantage, increase efficiency, continuous development, pressure from consumer groups and advanced technology. Technological advancement is rapid and costly and requires investment hence collaborations can cushion partners against costly investments. The benefits to strategic collaboration are varied and the highest ratings from respondents were improved flexibility, improved resource utilization and persuading retailers to give special displays. From the findings, strategic collaboration with the small and medium supermarkets was only practised to a very small extent almost nil. It is further recommended that the small supermarkets should create a niche for themselves so that they can attract the large supermarkets to partner with them more. Due to time and cost constraints, the study could not be carried out nationwide but was carried out on a small sampled population in Nairobi. The study also targeted to get responses from the General Managers of employees of equivalent position but most of them delegated to their juniors. Collaboration with authorities such as Government is essential for inclusivity of all stakeholders in friendly policy formulations and implementation. The study findings indicate a considerable level of strategic collaboration with Government. However, the study could not establish whether this collaboration with retailers and Government as supplier, customer or in policy making. Further research should be carried out to establish the forms of collaboration between the retailers and the Government.