Influence of value disciplines strategy on the management of efficiency levels in the pharmaceutical industry in Kenya

Abstract

Kenya vision 2030 has projected that pharmaceutical manufacturing as one of the possible areas of investment, yet doubts are often expressed as to the viability of pharmaceutical production in developing countries such as Kenya .The research assessed the influence of value disciplines strategy on the management of efficiency levels in the pharmaceutical industry in Kenya. The study had four objectives, namely, to establish the influence of operational excellence on the management of efficiency levels in the pharmaceutical industry in Kenya ; to examine the influence of customer intimacy focus on the management of efficiency levels in the pharmaceutical industry in Kenya; to determine the influence of product leadership on the management of efficiency levels in the pharmaceutical industry in Kenya and to establish the influence of distribution chain strategy on the management of efficiency levels in the pharmaceutical industry in Kenya . The literature review presented a theoretical review underlying the study, applicable theories or models to support the study that is; the resource-based view, Ansoff Product-Market Growth Matrix, Principal-Agent Theory and the Balanced Scorecard. In research methodology, the study adopted cross sectional survey design. The population of interest was composed of all registered Kenyan pharmaceutical manufacturing companies as availed by the KAM directory. The sampling frame was composed of only firms engaged in manufacturing, distribution and marketing of pharmaceutical products in Kenya that formed the researcher’s body of interest. Sampling technique was purposively sampling. The research instrument was a questionnaire. Analysis of the data was done using descriptive statistics to generate information such as means, standard deviations, frequencies and percentages and to plot charts such as bar and pie charts . Inferential statistics software used was SPSS version 20. The study sought to collect data from 157 respondents working in procurement, manufacturing, warehousing, sales, marketing, customer service and finance departments of pharmaceutical manufacturing firms in Kenya but the researcher managed to collect 134 questionnaires representing 85% response rate. A questionnaire was used to collect primary data. Regression and correlation analysis was done to test the relationship between the study variables. The study findings indicated that there was a positive and significant relationship between operational excellence, customer intimacy, product leadership and distribution chain strategy on the management of efficiency levels in the pharmaceutical industry in Kenya. The hypotheses were tested and empirically support the study thus any positive change in operational excellence, customer intimacy, product leadership and distribution chain strategy led to increased efficiency levels in the pharmaceutical industry in Kenya. The study concluded that Kenyan pharmaceutical industry have put a lot effort in producing high quality generic pharmaceutical products but are trying to implement strategic management practices via value disciplines strategy as manifested in the form of operational excellence, customer intimacy, product leadership and distribution chain strategies. The study recommends that for pharmaceutical industry in Kenya to be market leaders, they have to embrace value disciplines strategies and practice them, maintain threshold standards and dominate the market. The government should create an enabling environment for businesses to improve their market leadership in the industry.