Competitive Strategies and Competitive Advantage of Locally Owned Building and Construction Firms in Kiambu County, Kenya

Abstract

Constant changes experienced in the current business world makes its environment to be dynamic and complex. For competitive advantage be gained over the rivals, firms have to be compelled to adopt competitive strategies. The study was aimed at closing the research gaps identified on competitive strategies and competitive advantage of locally owned building and construction firms in Kiambu County, Kenya. The research objectives were to investigate the influence of differentiation strategy, product quality strategy, combination strategy and innovation strategy on competitive advantage of locally owned building and construction firms in Kiambu County, Kenya. The study was anchored on Michael Porter’s Competitive Forces Theory, Resource Based View Theory, Game theory and Innovation Diffusion Theory of Technological Innovation. The study adopted descriptive and explanatory research designs. The target population was 175 locally owned building and construction firms registered by the relevant body. A sample size of 58 firms was involved in this study. Respondents were the project managers or senior staff member drawn from the sampled firms. The study used proportionate sampling strategy in order to come up with the sample size. Questionnaires were employed in obtaining primary data. The research questionnaires were prior subjected to validity and reliability tests to ensure they met the required standards before the actual study. Data collected was analyzed by both descriptive analyses such as standard deviations, means and frequencies and inferential analysis such as regression coefficients. The information was further displayed in using graphs, Tables, charts and also in prose-form. The key findings of the study show that differentiation strategy, product quality strategy, combination strategy and product quality strategy were widely adopted by the locally owned building and construction firms and they had a positive influence on the competitive advantage of the firms with regression coefficients r = 0.700, r = 0.450, r = 0.363 and r = 0.119 respectively. Furthermore, the study also established that product quality strategy enabled clients to have product satisfaction with most of the products being durable and with minimum complaints recorded. Combination strategy played a key role in ensuring stakeholders were involved in key decision makings, lower the costs of products and improve customer loyalty, and although focus strategy directly influenced competitive advantage, its impact on competitive advantage was lower compared to the other strategies under this study. The study recommend that Locally owned building and construction firms management need to ensure that the firms widely practice differentiation strategy as it has a huge influence on competitive advantage of the firms compared to other strategies adopted by various firms. The firms should consider adopting product quality strategy due to its positive influence on competitive advantage, but should ensure that they come up with various appropriate methods of not incurring huge costs when developing their products. Combination strategies such as cost cutting strategies should widely be adopted by the firms since some of the products offered by the firms hardly find market in the targeted market segment, making them to be sold at relatively lower prices thereby leading to reduced revenues in the firm