Strategies Adopted by Insurance Companies in Kenya to Attain Sustainable Competitive Advantage

Abstract

Whether an organization remains competitive or not, largely depends on the quality ofdecisions made by its executives (Myerson, 1991). This is partly because the present daycompetitive marketing patterns enable the competitors to come to reality with the factthat future marketing will be highly influenced by how an organization plays its cards.Generally, successful businesses rely on a strategy based aspect, which in turn maynecessitate use of appropriate decision tools that enhance its competitive advantage. Sustainable competitive advantage in any organization is achieved when the competition cannotmatch the organization‟s ability to sustain its lead in the market, through its strategies.Insurance industry is equally competitive and Insuranceplayers have taken upseveral strategies that have had considerable effect on the companies‟ efficiency,productivity change, market structure and performance in the insurance industry. Thestudy set out to determine the competitive strategies adopted by insurance companies in Kenya and to establish the influence of these strategies on sustainable competitiveadvantage. It adopted a methodology that embraced both primary and secondary data in order to achieve these objectives. The secondary data was collected by use of desk searchtechniques from published companies‟ publications. Primary data, on the other hand, wascollected using questionnairesgiven to respondents of Insurance companies. The research targeted fifty respondents in senior and executive positionswithin insurance companies in Kenya, as well as a few staff in lower management cadres at thecompany. From the fifty interviews that were initially projected, forty were successful and ten did not respond. On successful completion,the study identified these strategies as comprising Nearness to customers; Competitive premiums; Low labour costs; Minimal operation costs; Network coverage; Research and development skills; Creativity and innovation skills; Marketing skills, communication and Market segmentation. Of all these strategies, the study has found that competitive premiums, low labour cost, minimal operational cost, marketing skills and effective communication skills were the most popular effective strategies adopted by the companies to counter competition in the industry. In conclusion,quality and convenient customer service,marketingskills, market segmentation, communication, creativity and innovation skills and resources and huge capital base are the commonly used strategies by insurance companies to sustain their competitiveness. The study came up with contributions to knowledge, theory, managerial policy and managerial practice. The study recommendsto policy makers in the insurance industry to make use of these findings in order to make use of these findings in order to come up with structures and policies to assist the insurance industry grow.