Differentiation Strategy and the Performance of Medical Insurance Companies in Kenya
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Date
2024-09
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Publisher
Kenyatta University
Abstract
Against a backdrop of escalating global competition, health insurance firms grapple with the need to stand out amidst a saturated market. With this in mind, this study aims at investigating differentiation strategy and its effect on the performance of medical insurance companies in Kenya. The general objective of the study was to investigate the effect of differentiation strategy on performance of Health Insurance Companies in Kenya. The specific objectives of the study include investigating the impact of product considerations, personnel initiatives, distribution aspects and image practices on the performance of medical insurance companies in Kenya. Drawing on established theories such as Resource-Based View, Brand Equity Theory, and Dynamic Capabilities Theory, the study employs a multi-theoretical framework to provide a nuanced understanding of the complex relationships between differentiation strategies and organizational outcomes. Adopting the descriptive research design, the target population comprises 980 employees in the medical insurance firms in the top management and middle level management in Nairobi, drawn from the respective insurance firms’ Human Resources Departments. Employing a multi-stage sampling technique, the established sample size is 101 top and middle level management staff who were reached by stratified random sampling. A semi-structured questionnaire used to collect primary data, and was distributed through a drop-and- pick- latter approach. A pilot test was performed to assess the reliability and validity of the questionnaire. Cronbach’s Alpha coefficient was employed to determine the reliability of the research instrument. Data was analyzed using both descriptive and inferential statistics. Descriptive statistics measures of mean and standard deviation was used, while for inferential statistics, regression equations were employed. The study established that product considerations strategy, personnel initiatives strategy, product considerations strategy and image practices strategy had a positive significant effect on performance of health insurance companies in Kenya. The study concludes that product considerations is the key aspect distinguishing one company’s products or services from its competition. Personnel initiatives strategy gives an organization the ability to respond in time to the needs of their members through the skills and knowledge of employees. A differentiated distribution strategy allows insurance companies to expand their sale potential by getting their product in front of more potential customers. An effective image establishes the product's character and value proposition and a person responds differently to company and brand images. The study recommends that the insurance companies should consider opportunities for differentiation in all of its production areas: marketing, product management, engineering, sales, and customer support. Organizations looking to build personnel initiatives strategy will need to produce or design extremely unique or distinctive products or services that create increased value for the consumer. The insurance companies should devote resources to channel management preferably at least one dedicated manager whose sole responsibility is to manage those relationships and build the marketing programs to drive revenue through the channel. The insurance companies should identify their brand gaps, which are the discrepancies between their desired and actual brand performance.
Description
A Research Project Submitted to the School of Business Economics and Tourism in Partial Fulfilment of the Requirements for the Award of Masters Degree in Business Administration (Strategic Management Option) of Kenyatta University, September 2024.
Supervisor
Patricia Kungu