Generic Strategies and Performance of Pharmaceutical Firms in Nairobi City County, Kenya
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Date
2024-07
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Kenyatta University
Abstract
There is a very high rise in competition in the pharmaceutical industry and therefore, pharmaceutical companies in Kenya need to have application of generic strategies for them to increase their profits and market share. The research problem was attributed to high production cost and high level of competition which has been on the rise in the Kenyan pharmaceutical sector, this had a challenge effect to the companies therein. This is as a result of numerous sellers who are competing for their own market share in the same market with similar range of products. This has resulted to companies having the challenge of maintaining their profitability which in return had impact on their operations. The main reason that motivated this research to be carried out was to identify the impact that generic strategies have on organization performance in pharmaceutical sector in Nairobi. Specific objectives were: investigating impact that cost leadership strategy has on organization performance; to investigate scope which differentiation influenced organization performance, and to determine the influence focus strategy can bring to the organization performance among pharmaceutical firms all these in Nairobi, Kenya. This study applied three theories and models, that is: Porter's five forces model, the resource-based view theory, and the Balanced scorecard model. The target population for the research was 100 pharmaceutical companies in Nairobi. Researcher collected data from 80 people using a survey method called semi-structured questionnaires. These were delivered using drop-off and pick-up as well as online methods. For analyzing the data, researcher used descriptive statistics to summarize the information and inferential statistics to draw conclusions. To find out how different factors are related, Pearson's correlation was applied by the researcher. In order to figure out the importance of each factor, the researcher used a multiple linear regression model. Cronbach's alpha correlation coefficient was calculated since this helped in identifying the reliability of the questionnaires that were used during data collection. This study adopted content validity which involved guidance from supervisor. The study's findings were presented through tables, allowing for clear visualization of the collected data. The ethical considerations were adhered to so that security and privacy rights of the participants were not violated. Finally, conclusions were made according to the finding discovered during the research. The research aimed to understand how different generic strategies affected performance of pharmaceutical companies. The study surveyed 100 firms with a target population of 80 respondents using semi-structured questionnaires, and 75 of them responded accordingly to the questions asked, which is a 93.75% response rate. It was established that generic strategies had a positive influence on performance of pharmaceutical companies in Nairobi. This research recommended that companies should focus on cost leadership by working closely with suppliers and involving stakeholders since this would drive the towards gaining competitive advantage. Also, they recommend investing in differentiation. This would be achieved by making their, products, and services unique and encourage continuous training of their staff to enhance innovation. Finally the study recommended pharmaceutical companies to decide carefully the niche where to apply focus strategy on their products and services.
Description
A Research Project Submitted to the School of Business, Economics and Tourism in Partial Fulfilment of the Requirements for the Award of the Degree of Master of Business Administration (Strategic Management Option), Kenyatta University, July 2024.
Supervisor
Njeri Njuguna Videlis