Competitive Strategies and Operational Performance of Generic Pharmaceutical Manufacturing Firms in Kenya
Abstract
The Kenyan generic pharmaceutical manufacturing sector faces intense competition from imports, underutilised capacity and lower-cost foreign suppliers. Despite government aims to achieve at least 50% local production of essential medicines by 2026, firms struggle with high costs, quality issues and weak delivery performance. This study investigated the relationship between Porter’s generic competitive strategies-cost leadership, differentiation, and focus- and the operational performance of Kenya’s 44 registered generic pharmaceutical manufacturers. Using a descriptive and explanatory survey design, data were gathered from 118 senior managers via stratified and systematic random sampling. Operational performance was measured across cost efficiency, product quality, productivity, and delivery reliability. Descriptive statistics, Pearson correlation, and multiple linear regression analyses were applied. All three strategies showed positive, statistically significant relationships with operational performance. Cost leadership had the strongest association (β = 0.42, p < .001), followed by differentiation (β = 0.31, p < .001) and focus (β = 0.28, p = .002). Together, the strategies explained 57.9% of the variance in operational performance (R² = .579). The results confirm the ongoing usefulness of Porter’s framework and the Resource-Based View in an emerging-market, highly regulated setting. Managers should emphasise scale economies, process efficiency and strict cost control while selectively improving quality systems and niche strengths. Policymakers are urged to promote local active pharmaceutical ingredient production and ease compliance burdens to advance national health and industrialisation objectives.
Keywords: competitive strategies; operational performance; cost leadership; differentiation; focus strategy
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