Effects of Competitive Strategies on the Competitive advantage of Auditing Firms in Nairobi County, Kenya

Abstract

The ever changing and turbulent competitive business environment pose major challenges to large auditing firms like any other organization in Kenya and managers have been struggling to compete favorably. Porter argues that superior performance can be achieved through pursuit of a competitive generic Strategy. This has made identification and pursuit of the right competitive strategies as a source of superior performance to become a predominant priority in all organizations. Nevertheless, the application of the right strategies is still a concern in many large auditing firms which have made little effort to comprehend how Generic Strategies can give them a performance advantage over their rivals. This study sought to evaluate the effects of competitive strategies on the competitive advantage of auditing firms in Nairobi County, Kenya. The specific objectives of the study were: to establish the effects of service quality strategy on the competitive advantage of auditing firms in Nairobi County, Kenya, to determine the effect of software development strategy on the competitive advantage of auditing firms in Nairobi County, to ascertain the effect of staff training strategy on the competitive advantage of auditing firms in Nairobi County, and to find out the effects of leadership quality strategy on the competitive advantage of auditing firms in Nairobi County. A review of the relevant literature was undertaken in order to eliminate duplication of what has been done and provide a clear understanding of existing knowledge base in the problem area. The literature review was based on authoritative, recent, and original sources such as journals, books, thesis and dissertations. On the methodology the study utilized a descriptive research design to undertake the study. The target population comprised of 678 registered audit firms in Nairobi County. The study adopted the stratified sampling technique. From the possible 678 target population, stratified random sampling was employed to select a total of 136 sample population. A questionnaire was used to collect primary data from the respondents. Statistical Package for Social Sciences (SPSS) was used as an aid in the analysis. Data was analyzed using descriptive statistics whereby frequencies and percentages, generated from the various data categories were computed and presented in graphs, pie charts and tables. The study found that nature of services help reduce wastage which increases competitive advantage of the organization. The study also found that the nature of the software increases service delivery which increases the competitive advantage of the firm. The study concluded that qualification of the staff members helps in creating efficiency which improves the competitive advantage. The study recommend that audit firms should adopt strategies such as diversification of products to include consultancy and accountancy, charging reasonable fees, expansion to new market and ethical considerations, and efficient and timely service to client.