Strategic Alliances and Firm Competitiveness: A Survey of Supermarkets in Nairobi-Kenya

Abstract

This study sought to examine the effect of strategic alliances on competitiveness of supermarkets in Nairobi. The study’s objectives were to establish the effects of innovation, financing, and distribution strategic alliances on the competitiveness of supermarkets in Nairobi. The study used case study research design. The population of the study was 95 branch managers of the 7 major supermarkets in Nairobi. Both stratified and simple random sampling were used to pick a sample of 77 branch managers. Questionnaire was used to collect data. Data was analyzed using descriptive statistics, Pearson correlation and multiple regression analyses. Diagnostic tests were also used to test reliability of regression model. The study found that innovation alliances (? = 0.790, p < 0.05); distribution alliance (? = 0.009, p < 0.05) and financing strategic alliances (? = 0.920, p < 0.01) had a significant effect on the competitiveness of supermarkets. However, challenges such as lack of top management commitment derailed competitiveness. The study concluded that innovation strategy had a positive significant relationship with the competitiveness of the supermarkets. It concludes that, by entering into financing strategy, an increase in the competitiveness of the supermarkets was realized. Furthermore, it concluded that distribution strategic alliance had a positive significant relationship with the competitiveness of the supermarkets. The study concludes that despite formation of strategic alliances, various supermarkets were still exposed to a myriad of top management challenges. The study recommends that the supermarkets should ensure that innovation strategy with various partners is improved. This can be achieved through engagement with partners that have embraced modern technologies such as ‘electronic point of sale’ (EPOS). It is suggested that financing alliances should also be improved by engaging with partners that have stable capital. Through formation of financial strategic alliance with firms with good financial muscles, exposure to financial risks can be minimized. This research proposes that all the supermarkets should ensure that measures are put in place to improve distribution strategic alliances to minimize business differences with partners. Measures such as, knowing how partners operate, how they make certain distribution decisions, and how they allocate resources during distribution could go a long way in enhancing product distribution. Finally, it recommends that the top management should be able to offer timely financial and administrative support to realize the dream of engaging in strategic alliances. The organizations should also be able to streamline legal and regulatory operational policies with partners so as to benefit from the formed strategic alliances. Keywords: Innovation Strategic Alliances, Financing Strategic Alliances, Distribution Strategic Alliances, Top Management Support & Competitiveness