Determinants of Competitive Advantage in Medium and Large Garment Companies in Kenya

Abstract

Over the past three decades, Kenya’s apparel sector has experienced decreasing competitiveness mainly due to the shift from government protectionism to free market trade. While government protectionism has been the main source of competitiveness for Kenya’s apparel sector, it cannot be a viable factor for growth any more. As the industry evolves in many other ways, its competitive advantage factors should be changed accordingly. This study is a preliminary attempt to illustrate how the garment industry in Kenya can obtain competitive advantage in the global economy and to suggest future direction. Specifically, the study aimed at establishing the influence of knowledge management, managerial networking, innovation and customer responsiveness on competitive advantage in medium and large garment companies in Kenya. The study, further, sought to establish the moderating influence of competitive intensity on the relationship between independent and dependent variables in this study. A cross-sectional survey design was adopted, using both qualitative and quantitative approaches. From a target population of 170 firms, 83 firms were drawn to form the sample for this study. A multi sampling technique was applied to attain the sample distribution pattern, and in choosing the actual firms that were to take part in the study; in the first stage, the firms were stratified in terms of their aggregate number per county. The second stage entailed the computation of weighted proportions to determine the number of firms that would be drawn from each county. In the third stage, simple random sampling (SRS) technique was applied to extract the actual firms that were to take part from each county. Questionnaires were used to collect primary data. To test reliability of the data collection instrument, the questionnaire was piloted among 20 firms. Experts in the areas under study were further engaged to test construct and content validity. The response rate for this study was 86.7% (72 firms). Using the data collected, normality, multicollinearity, heteroscedasticity and sampling adequacy tests were conducted all indicating appropriateness of data. Descriptive statistics aided in generating numerical values for qualitative data. Using linear regression analysis and analysis of variance, Null hypotheses (Ho1- Ho5) were tested and rejected with a strong statistical significance that the independent variables explored in this study influenced the dependent variable (competitive advantage). Overall, the moderation results indicated a statistically significant moderating influence of competitive intensity on the relationship between the dependent and independent variables. The study recommends the enhancement of capabilities in relation to knowledge management, innovation and customer responsiveness, but a cautious approach in joining business networks. The study proposes policy formulation that supports measures that boost and reinforces the competitiveness of Kenya’s garment industry. Consequently, this study provides vital information and knowledge from where research agenda and policy discussions can be referenced. The findings of this research will help enhance the competitiveness of Kenya’s garment industry, especially in the current era of open markets and trade liberalization.