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FACTORS INFLUENCING COMPETITIVENESS IN THE CEMENT INDUSTRY IN KENYA: A CASE OF SAVANNAH CEMENT LIMITED BY DAVID ANTON MANG’EA UNITED STATES INTERNATIONAL UNIVERSITY - AFRICA SUMMER 2018
FACTORS INFLUENCING COMPETITIVENESS IN THE CEMENT INDUSTRY IN
KENYA: A CASE OF SAVANNAH CEMENT LIMITED
BY
DAVID ANTON MANG’EA
UNITED STATES INTERNATIONAL UNIVERSITY - AFRICA
SUMMER 2018
FACTORS INFLUENCING COMPETITIVENESS IN THE CEMENT INDUSTRY IN
KENYA: A CASE OF SAVANNAH CEMENT LIMITED
BY
DAVID ANTON MANG’EA
A Research Project Submitted to the Chandaria School of Business in Partial
Fulfillment of the Requirements for the Degree of Masters in Business Administration
(MBA)
UNITED STATES INTERNATIONAL UNIVERSITY - AFRICA
SUMMER 2018
ii
STUDENT’S DECLARATION
I, the undersigned, declare that this is my original work and has not been submitted to any
other college, institution or university other than the United States International University in
Nairobi for academic credit.
Signed: ________________________ Date: _____________________
David, Anton Mang’ea (652637)
This project has been presented for examination with my approval as the appointed
supervisor
Signed: ________________________ Date: _____________________
Prof. Timothy C. Okech, PhD
Signed: ________________________ Date: _____________________
Dean, Chandaria School of Business
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COPYRIGHT
All rights reserved. No part of this research project may be produced or transmitted in any
form or by any means, electronic, magnetic tape or mechanical including photocopying,
recording of any information, storage and retrieval systems without prior written permission
from the author.
© Copyright by David, Anton Mang’ea (652637), 2018
iv
ABSTRACT
The purpose of study was to establish the factors affecting competitiveness of Savannah
Cement Limited in Kenya. The study was guided by three specific objectives namely to:
examine the effect of leadership on competitiveness of Savannah Cement Limited; establish
the influence of technology on the competitiveness of Savannah Cement Limited; and find
out how product marketing influence competitiveness of Savannah Cement Limited in
Kenya.
The research used descriptive survey method. The population of interest was all employees
of Savannah Cement Limited in Kenya which was 168 employees at the time of the study.
This study adopted the stratified random sampling technique. A sample size of 118
employees was selected. The research used primary data, which was collected using a
structured questionnaire comprising of closed ended questions, checklist questions and five
point Likert scale. Both descriptive and inferential statistics were used to analyze the data
obtained from the research. The data was presented in tables and figures. Statistical Package
for Social Sciences (SPSS) was used in analyzing and presenting the data.
The study found out that company leadership had been successful in Savannah Cement
Limited strategy implementation. These findings were drawn from the positive correlation
between leadership strategic implementation and competitiveness. There was a positive
relation between innovation and competitiveness of the company underscoring the
importance of innovation for the company to remain competitive in the cement industry. The
study, however, found out that the company was not performing well in the area of employee
motivation and inspiration and the company leadership did not quickly adapt to change and
new realities in the market.
The study found a positive relationship between technology and competitiveness.
Technology had the most positive influence on competitiveness compared to the other two
variables and therefore a better predictor of competitiveness. It revealed that the company
used the newest technology in its production process and had a robust information
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communication technology (ICT) tools and systems underscoring the central role played by
technology in enhancing the company’s performance and thereby increasing its
competitiveness. However, the study further revealed that the company did not have a robust
research and development (R&D) function and was not keen on promoting R&D and ICT.
The study found out that the company engaged in positive marketing activities aimed at
gaining competitiveness and that its products were better positioned in the market compared
to its competitors. The study found out that product marketing based on positive marketing
activities, effective advertising activities, change in marketing techniques, investment in
market research, better positioning of products, adequate budgeting techniques had a positive
relationship with competitiveness. The study, however, revealed that the company had not
changed its marketing techniques in the past one year, had not invested in market research
and had not put in place and adequate advertising budget.
The study concluded that leadership factors had a weak positive influence on competitiveness
of the company. With respect to technology, the study concluded that it was the strongest
positive predictor of competitiveness. All technology factors positively and significantly
influenced competitiveness. The study further concluded that product marketing also had a
positive influence on competitiveness.
The study recommends that the company leadership puts more focus on nurturing,
motivating and inspiring its employees as well as adapting to change and new realities in the
market place. The study recommends that the company continues to embrace technology that
is beneficial to its competitiveness. With respect to product marketing the study recommends
that the company invests in market research and review its marketing techniques based on the
market research results. The company should also put in place an adequate advertising
budget. Through the study it was determined that leadership factors, technology and product
marketing together only account for 60.9% of total variation in competitiveness and therefore
it would be valuable to explore other factors that could explain competitiveness of company.
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ACKNOWLEDGEMENT
This research project would not have been possible without the invaluable support of various
people. I have benefited immensely from the wise counsel and continuous support of my
supervisor, Prof. Timothy C. Okech.
I am grateful to my classmates at USIU-A, my colleagues at Savannah Cement Limited and
all the people I had pleasure working with during this project. They in one way or the other
contributed to and inspired the success of this work.
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DEDICATION
This research project is dedicated to my family for their encouragement and support and to
the Almighty God for His enduring love.
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TABLE OF CONTENTS
STUDENT’S DECLARATION ............................................................................................. ii
COPYRIGHT ......................................................................................................................... iii
ABSTRACT ............................................................................................................................ iv
ACKNOWLEDGEMENT ..................................................................................................... vi
DEDICATION....................................................................................................................... vii
TABLE OF CONTENTS .................................................................................................... viii
LIST OF TABLES ................................................................................................................. xi
LIST OF FIGURES ............................................................................................................. xiii
LIST OF ABBREVIATIONS ............................................................................................. xiv
CHAPTER ONE ..................................................................................................................... 1
1.0 INTRODUCTION........................................................................................................ 1
1.1 Background of the Study ............................................................................................ 1
1.2 Statement of the Problem ........................................................................................... 6
1.3 General Objective ....................................................................................................... 7
1.4 Specific Objectives ..................................................................................................... 7
1.5 Significance of the Study ........................................................................................... 8
1.6 Scope of the Study...................................................................................................... 9
1.7 Definition of Terms .................................................................................................... 9
1.8 Chapter Summary ..................................................................................................... 10
CHAPTER TWO .................................................................................................................. 11
2.0 LITERATURE REVIEW ......................................................................................... 11
2.1 Introduction .............................................................................................................. 11
2.2 Leadership and Competitiveness ............................................................................. 11
ix
2.3 Technology and Competitiveness ............................................................................ 15
2.4 Product Marketing and Competitiveness ................................................................. 20
2.5 Chapter Summary ..................................................................................................... 25
CHAPTER THREE .............................................................................................................. 26
3.0 RESEARCH METHODOLOGY ............................................................................. 26
3.1 Introduction .............................................................................................................. 26
3.2 Research Design ....................................................................................................... 26
3.3 Population and Sampling Design ............................................................................. 27
3.4 Data Collection Methods .......................................................................................... 29
3.5 Research Procedures ................................................................................................ 30
3.6 Data Analysis Methods ............................................................................................ 32
3.7 Chapter Summary ..................................................................................................... 32
CHAPTER FOUR ................................................................................................................. 33
4.0 RESULTS AND FINDINGS ..................................................................................... 33
4.1 Introduction .............................................................................................................. 33
4.2 Response Rate and Background ............................................................................... 33
4.3 Leadership Factors and Competitiveness of Products.............................................. 39
4.4 Technology and Competitiveness ............................................................................ 45
4.5 Product Marketing and Competitiveness ................................................................. 51
4.6 Relationships between Leadership Factors, Technology, Product Marketing and
Competitiveness .................................................................................................................. 55
4.7 Chapter Summary ..................................................................................................... 58
CHAPTER FIVE .................................................................................................................. 59
5.0 DISCUSSIONS, CONCLUSIONS AND RECOMMENDATIONS ...................... 59
5.1 Introduction .............................................................................................................. 59
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5.2 Summary .................................................................................................................. 59
5.3 Discussion ................................................................................................................ 61
5.4 Conclusion ................................................................................................................ 66
5.5 Recommendations .................................................................................................... 67
REFERENCES ...................................................................................................................... 68
APPENDICES ....................................................................................................................... 79
APPENDIX I: INTRODUCTORY LETTER .................................................................... 79
APPENDIX II: RESEARCH QUESTIONNAIRE ............................................................ 80
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LIST OF TABLES
Table 3.1: Population Distribution .......................................................................................... 27
Table 3.2: Sample Size Distribution ....................................................................................... 29
Table 3.3: Overall Reliability Statistics .................................................................................. 31
Table 3.4: Item Total Statistics ............................................................................................... 31
Table 4.1: Response Rate ........................................................................................................ 34
Table 4.2: Leadership Factors ................................................................................................. 40
Table 4.3: Mean and Standard Deviation of Leadership Factors and Competitiveness ......... 41
Table 4.4: Leadership Factors Correlation Analysis............................................................... 43
Table 4.5 Leadership Factors Model Summary ...................................................................... 43
Table 4.6 Leadership Factors Anova ...................................................................................... 44
Table 4.7 Leadership Factors Coefficients ............................................................................. 44
Table 4.8 Technology and Competitiveness ........................................................................... 46
Table 4.9: Mean and Standard Deviation of Technology and Competitiveness ..................... 47
Table 4.10 Technology Correlation ........................................................................................ 49
Table 4.11 Technology Model Summary ............................................................................... 49
Table 4.12 Technology Anova ................................................................................................ 50
Table 4.13 Coefficients of Technological Factors .................................................................. 50
Table 4.14 Product Marketing and Competitiveness .............................................................. 51
Table 4.15 Mean and Standard Deviation of Product Marketing and Competitiveness ......... 52
Table 4.16 Results of Correlation Analysis for Product Marketing and Competitiveness ..... 53
Table 4.17 Product Marketing Model Summary .................................................................... 54
Table 4.18 Product Marketing Anova ..................................................................................... 54
Table 4.19 Product Marketing Coefficient ............................................................................. 55
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Table 4.20 Competitiveness Factors Correlation .................................................................... 56
Table 4.21 Competitiveness Factors Model Summary ........................................................... 56
Table 4.22 Competitiveness Factors Anova table................................................................... 57
Table 4.23 Competitiveness Factors Coefficients .................................................................. 57
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LIST OF FIGURES
Figure 4.1 Ages of Respondents ............................................................................................. 34
Figure 4.2: Gender of Respondents ........................................................................................ 35
Figure 4.3 Highest Education Level of Respondents.............................................................. 36
Figure 4.4 Experience in Years ............................................................................................... 37
Figure 4.5 Departments of Work ............................................................................................ 38
Figure 4.6 Departmental Position of Management ................................................................. 39
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LIST OF ABBREVIATIONS
ARM Athi River Mining
CRH Cement Roadstone Holdings
GDP Gross Domestic Product
ICT Information Communication Technology
KEBS Kenya Bureau of Standards
OECD Organisation for Economic Cooperation and Development
PESTEL Political, Economic, Social, Technological, Environmental, Legal
R&D Research and Development
RBV Resource Based View
SAP Systems Applications Products
SCL Savannah Cement Limited
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CHAPTER ONE
1.0 INTRODUCTION
1.1 Background of the Study
The structure of the global cement industry is complex. It consists of cement and clinker
movements within local, national, regional and global markets. The structure is very dynamic
and affected by environmental factors which include public sector spending on infrastructure
projects, demand for housing, macro-economic growth, spending levels, among others. There
are relatively few multinational cement companies dominating the global cement market
(Mukherjee, 2014). LafargeHolcim based in Switzerland is the world largest cement
producer with a total capacity of 345.2 million tonnes per year. The other players in the top
ten global cement producers are HeidelbergCement, Cemex, UltraTechCement, Votorantim,
InterCement, CRH, Buzzi Unicem, Eurocement and Dangote Cement (Edwards, 2017).
The significant investment in the regional cement industry by some of the biggest global
cement producers, LafargeHolcim, Cemex and Dangote, shows the complexity of the cement
market. LafargeHolcim is the owner of the biggest cement company in Kenya, Bamburi
Cement, besides holding significant shares in East African Portland Cement Co. Ltd. Nigeria
based Dangote Cement plans to enter the Kenyan cement market in 2021 (Juma, 2017). The
Eastern Africa region macro environment has been fairly stable given the single digit
inflation levels, steady currencies and lower interest rates leading to an increase in Gross
Domestic Product (GDP) growth as recorded in quarter 1 of 2016 (AIB, 2016). Cement
production in the region has been driven by large infrastructure projects, for instance, the
Standard Gauge railway in Kenya, booming construction activities in the region, energy
infrastructure projects in Uganda, among others.
With the entry of global cement companies in the local market, competition has become
aggressive than ever. Global competition has been sharpened by reduced trade barriers,
spread of technology and lower costs for communication and transportation (Liargovas &
Skandalis, 2012). This is true for the region and even individual countries like Kenya. The
fierce competition in the global, regional and local cement market requires individual firms
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to improve their competitiveness. Cement manufacturing firms in Kenya face increased
competition exacerbated by new entrants, threat of imports and increased capacities coupled
with high production costs particularly on energy, imported clinker and transport.
Furthermore, Kenya's economic context is largely characterized by high inflation, high
interest rates and volatility in currency fluctuations (Nyasimi & Gitau, 2016).
Several definitions of competitiveness have been suggested. Oxford dictionary defines
competitiveness as the strong desire for a company to be more successful than others.
Competitiveness of a firm is the ability of a firm to do better than comparable firms in sales,
market share or profitability (Berger & Humphrey, 2007). Potential investors have used the
firm’s relative prices or its market share and its profitability to assess its competitiveness
before they make rational decisions for investment especially in the stock marks (Notta &
Vlachvei, 2011). Competitiveness at macroeconomic level is defined by Michael Porter and
World Economic Forum. They define the national competitiveness as a set of factors,
policies and institutions that determine the level of the productivity of a country (Marginean,
2006). The focus of competitiveness has not just been a macroeconomic phenomenon but
has been significant at regional and local scales (Kitson, Ron, & Tyler, 2006).
From a regional perspective, competitiveness has simply been defined as the success to
which regions compete with one another in some way, for instance, export market share or
ability to attract capital or human resource (Kitson, Ron, & Tyler, 2006). Michael Porter
noted that competitiveness is a function of forceful innovation, progressiveness and an ability
to change and improve (Porter, 1992). Porter looked at competitiveness from a productivity
perspective. Krugman shared a similar view that competitiveness is just another way of
saying productivity (Krugman, 1994). According to Krugman, trying to define
competitiveness of a nation is more problematic than defining competitiveness of a company
since competitiveness of a company is just its bottom line.
We have various models to analyze industry competitiveness. Porter (2008) analyzed
competitiveness from an industry perspective as well. He is credited with the Five Forces of
competitive analysis. According to him the industry forces are existing competitor rivalry,
bargaining power of suppliers, bargaining power of consumers, threat of substitutes and
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threat of new entrants. In addition, Porter developed the Diamond Model of industry
competitiveness (1990). Porter (1990) considered competitiveness as a function of four major
determinants namely, factor conditions; home demand conditions; related and supporting
industries and firm strategy, structure, and rivalry.
As can been seen above, competitiveness is a multi-dimensional concept analyzing the
macroeconomic level, industry level and firm level. This study will focus on the firm level of
the term competitiveness. We can say a competitive firm as one which can produce services
or products of superior quality and lower costs than its local and global competitors (Das &
Das, 2011). Competitiveness is synonymous with a company's long-run profit performance
and its ability to pay its employees and provide superior returns to its shareholders (Buckley,
Christopher, & Prescott, 1988). In this context, we measure a firm’s competitiveness by its
financial performance. When profitable opportunities exist, firms increase their production
and sales. Thus, the existence of a good financial performance suggests a firm or industry
with increasing competitiveness just as a bad financial performance suggests a firm or
industry with falling competitiveness. The various financial performance measures often
employed for measuring the competitiveness of companies include return on sales (ROS)
which shows how much a firm earns in relation to its sales, return on assets (ROA) which
shows a firm’s ability to make use of its assets and return on equity (ROE) which shows the
return that investors take for their investments (Liargovas & Skandalis, 2012). Therefore,
competitiveness is very important for the firm’s long run profit performance and its ability to
repay its costs as well as providing better returns to the shareholders (Muiru, 2009). This
study will assess the factors affecting SCL’s competitiveness in the cement industry in
Kenya.
As turbulence becomes the order of day in today’s business world, competitiveness has even
gained more relevance for a firm’s success and survival (Akben-Selcuk, 2016). There are
several factors that affect a firm’s competitiveness. These factors could either be macro,
industry or internal. Internal factors are the forces or conditions within the boundary of the
firm. These factors affect the firm’s ability to be responsive and compete in the external
environment. Some of the different internal factors that have been found to influence the
firms responsiveness to the external environment include financial ability, human resources,
4
leadership, marketing, innovation, management commitment and firm structures (Forbes &
Jermier, 2002; Delmas & Toffel, 2005).
The operations of the different internal factors compel the use of certain preferred strategies
within the firm to respond to problems (Schein, 2010). When the firm solves a certain
problem, it does so using the available skills, knowledge and resources (Howard-Grenville,
Nash, & Cog, 2008), so it is these resources and knowledge available to the firm that
represent the outcome of internal negotiation (Carlile, 2002; Howard-Grenville, 2005). The
internal factors revolve around the resources and capabilities of the firm (İhsan, 2012). A
resource-based view of the firm has been used to analyze the capabilities and resources of the
organization to enhance its return and competitiveness (Amit & Schoemaker, 1993; Oliver,
1997).
The firms industry is where the firm is rivaled by companies who produce and supply similar
goods and services (Ülgen, 2007). Porter (1990) defined industry as a group of firms that are
making products or supplying services that are close substitutes for each other. Industry
factors that impact the firm include buyer and suppliers bargaining power, intensity of
competition and the industry and product market structure (Oliver, 1997). These are the
factors sought to be analyzed in Porters Five Forces Model (Porter, 2008). Other relevant
factors in the industry are rate of market growth in an industry, degree of product or service
differentiation, switching costs be they supplier or customer, entry and exit barriers. How a
company mitigate against the adverse effects of the industry forces determine its survival in
that particular industry.
With technology and globalization the world has become borderless affecting four main
factors of business namely, communications; capital; corporations; and consumers (Ohmae,
2005). The barriers to communication have been significantly reduced while capital and
corporation can move almost freely to any part of the world in response to available market.
Consumers are no longer confined within narrow geographical locations but are spread
across the world. This has changed and broadened the external business environment making
international competition even more critical (İhsan, 2012). To survive, a company must
consider the macro environment in its strategies. Macro factors include political factors,
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economic factors, social factors, technological factors, environmental factors and legal
factors which are commonly known by the acronym PESTEL (Wambugu, 2012). To remain
competitive a firm should adopt a strategic approach to the management of macro
environmental events and occurrences. These factors are beyond the control of the firm but
affect its operations (İhsan, 2012).
Both cement production and consumption in Kenya has been on the rise in recent years. The
Kenya National Bureau of Statistics (2017) reported that total cement produced in Kenya
went up from 6,352.9 thousand tonnes in 2015 to 6,707.2 thousand tonnes in 2016 while
cement consumption went up from 5,708.8 thousand tonnes in 2015 to 6,302.0 thousand
tonnes in 2016. Cement oversupply in Kenya has resulted in price stagnation (Dyer & Blair,
2007).
As of January 2018, there were eight cement producing companies in Kenya namely;
Bamburi Cement Limited, Mombasa Cement Limited, Savannah Cement Limited, ARM
Cement (Athi River Mining Ltd), East African Portland Cement Co. Ltd, National Cement
Company Ltd, Rai Cement Limited and Karsan Ramji & Sons Ltd (Ndovu Cement) (AIB,
2016).
This is a case study of Savannah Cement Limited (“SCL”), a state of the art, Eco friendly
cement grinding plant with a capacity of 1.5 million tonnes a year. It is located in Athi-River,
30 kilometers from Nairobi City in Kenya. SCL, which was commissioned in July 2012, is
locally owned. It has a fifteen percent (15%) market share in the Kenya cement industry.
SCL is currently a grinding plant – basically grinding imported clinker (main raw material),
gypsum and pozzolana to produce two products namely Cement type 1 or CEM 1 42.5 and
Cement type IV or CEM IV 32.5R. CEM I 42.5 (cement class traditionally referred to as
Ordinary Portland Cement) is high strength cement, with a twenty eight day compressive
strength of 42.5 million Pascals, (MPA) hence its name CEM I 42.5. This kind of cement is
used in areas requiring high strength like in building of bridges, high rise buildings, and
building slabs. The CEM IV 32.5R is a medium strength cement that has a 28 day
compressive strength of 32.5MPA. This is general purpose cement used in brick laying,
plastering and any other general purpose (Savannah-Cement, 2016)
6
The grinding plant is a combination of roller press and V-separator before the mill
technology - the first of its kind in the region – making the plant the most energy-efficient in
the region. A One Thousand Two Hundred tonnes per day pozzolana drier is also in place to
ensure moisture free mill feed. The packing plant is equipped with three modern eight spout
rotor packers with a combined loading capacity of at least than six thousand tons per day. A
bulk loading facility is also installed for loading bulk cement on to road tankers.
Savannah Cement Limited’s market share has remained at around 15% in the last 3 years
despite its objective to acquire at least 25% market within its 5 year of operation. This has
warranted a review into factors determining its competitiveness in the Kenya cement
industry.
1.2 Statement of the Problem
With the growth of cement production and consumption, competition is more intensified,
eating into the industry’s margins. The industry’s net profit margin averaged 10 per cent in
2015 down from 15 percent in 2011. Cement prices have fallen from an average of $140 per
ton in 2011 to an average of $100 in 2015 (AIB, 2016). While SCL’s sales have increased
year on year in the last three years, its profit has decreased year on year within the same
period. This suggests depressed margins driven by reduced cement selling price and possibly
increased production costs. For SCL to enhance its profitability and earn an acceptable return
to shareholders and other stakeholders it needs to assess its competitiveness in the industry.
Shareholders and lenders expect a firm to preserve and enhance the wealth they have
entrusted to it (Hitt, Ireland, & Hoskisson, 2016).
While substantial studies have been done on competitiveness at the regional level there is
little published work on competitiveness at the firm level globally (Muiru, 2009). Nyasimi
and Gitau (2016) studied effects of strategic responses on competitiveness and sustainability
in cement manufacturing firms in Kenya and found that there is high level of competition
between the cement manufacturing companies and hence the firms need to put in place
strategies to counter the competition in order to gain competitive advantage. Liargovas and
Skandalis (2012) examined the financial and non-financial determinants of firm
competitiveness by studying 102 Greek firms. Their focus was to review the impact of key
7
determinants of a firm’s competitiveness. They found out that leverage, export activity,
location, size and the index for management competence significantly affected firm
competitiveness. Moturi (2017) evaluated the effect of internal factors on the financial
performance of firms in the cement manufacturing industry in Kenya. The study found out
that that internal factors and financial performance ratios were the driving force for cement
manufacturing companies in relation to their financial health. Nyawira (2010) examined the
responses by cement companies to the strategic challenges posed by competition in the
cement industry in Kenya. The study found out that the main strategic response that was
common between both the multinational cement companies and the indigenous cement
companies was expansion of production capacity. Mbongwe, Nyagol, Amunkete,
Humavindu, Khumalo, Nguruse, & Chokwe (2014) assessed the cement market dynamics
including barriers to entry, regulatory arrangements, and the outcomes observed in terms of
price and supply across Botswana, Kenya, Namibia, South Africa, Tanzania and Zambia. The
study found the cement industry across the countries examined to be a tight oligopoly with a
small number of producers controlling operations across countries.
From the literature reviewed, not much has been done in terms of competitiveness studies at
the firm level in the cement industry and thus informed policies cannot be formulated. For
Kenya to be competitive as a country, the individual firms need to be competitive. This study
therefore bridged this gap of knowledge by analyzing factors affecting competitiveness of
SCL in Kenya.
1.3 General Objective
The main objective of this study was to establish factors affecting competitiveness of
Savannah Cement Limited in Kenya.
1.4 Specific Objectives
The specific objectives of the study were:
8
1.4.1 To examine how leadership factors affect competitiveness of Savannah Cement
Limited in Kenya.
1.4.2 To establish the influence of technology on the competitiveness of Savannah Cement
Limited in Kenya
1.4.3 To find out how product marketing influence competitiveness of Savannah Cement
Limited in Kenya.
1.5 Significance of the Study
This study is expected to be useful to a number of key stakeholders. These consist of not only
the management of Savannah Cement Ltd but other similar management in the cement
industry, researchers and academicians, and government policy makers. The following sub-
sections illustrate how the various stakeholders are likely to gain from the study.
1.5.1 Savannah Cement Limited Management
The findings of this study will be beneficial to SCL management. They will understand the
areas they need to focus to improve SCL competitiveness. With the help of this study
findings, they will be able to formulate strategies in terms of leadership, technology and
product marketing relevant for enhancing competitiveness.
1.5.2 Government Policy Makers
The findings of this study will also be valuable to policy makers in government institutions
on matters concerning competition in the cement industry in Kenya and how to regulate the
industry. Policy makers will develop an understanding of the areas they need to monitor and
regulate to fuel fair competition in the cement industry to protect both the consumers and the
cement firms.
1.5.3 Researchers and Academicians
The findings of this study will be important to academicians and researchers of factors
affecting competitiveness of a firm in the cement industry in Kenya. Findings of this study
9
will form useful reference materials to future researchers besides other areas where they can
carry out research on.
1.6 Scope of the Study
The study was confined to SCL and the factors affecting its competitiveness in Kenya. This
was arrived at based on the assumption that, SCL being one of the major players in Kenya
cement industry, the factors could easily be related to the other cement players. The study
focused on SCL employees, the manufacturing plant and offices in Athi River, Machakos
County. A sample size of 118 employees was selected based on Yamane (1973) statistical
formula and data was collected and analyzed. The study was carried in between the month of
March 2018 to June 2018. The study evaluated leadership factors, technology and product
marketing in SCL. The influence of these three factors on competitiveness of the
organization was evaluated.
1.7 Definition of Terms
The common occurring terms in this study are defined below
1.7.1 Cement
Cement is defined as a hydraulic binder, i.e., a finely ground inorganic material which when
mixed with water forms a paste which set and hardens by means of hydration reactions and
processes and which after hardening retains its strength and stability even under water
(Hüschelrath, Müller, & Veith, 2013).
1.7.2 Clinker
Clinker is a dark grey nodular material produced by high-temperature reaction of a lime-
bearing material with one containing silica, alumina and ferrous materials. It is the main raw
material in cement production. (Charn-Hoon, Hyun-Seo, Chung-Bong & Ji-Whan, 2004)
10
1.7.3 Competitiveness
Competitiveness is the ability to design, produce and market products or services superior to
those offered by competitors, considering price and non-price factors (Momaya, Shee, &
Ajitabh, 2001).
1.8 Chapter Summary
This chapter begins with a background of the global cement market, delves into the regional
market, the local industry then focuses on SCL specifically. The statement of the problem
identifies the knowledge gap which necessitates the study. The objectives of this study, both
the general and specific, are clearly identified to guide the study. Significance of the study
and scope are clearly defined for purposes of clarity. In chapter two, the relevant literature
was reviewed with respect to the subject under study based on the research objectives.
Chapter three presented the research method used to carry out the research focusing on the
research design, population and sampling design, data collection methods, research
procedures, data analysis methods and presentation. Chapter four presented the results and
findings of the study and ultimately chapter five presented the summary, discussion of the
results, conclusions and recommendations of the study in that order.
11
CHAPTER TWO
2.0 LITERATURE REVIEW
2.1 Introduction
This chapter discusses the relevant literature with respect to the subject under study with a
particular focus on the specific objectives of the research. The study draws materials from
various sources which are related to the subject under study.
2.2 Leadership and Competitiveness
Leadership factors have been widely studied. Limsila and Ogunlana (2008) argued that the
word leadership has varied meanings depending on the scholar defining it. It has been
defined in terms of the personality, position, responsibility, influence process, an instrument
to achieve a goal, behaviours, result from interaction and given some other meanings by
various scholars. The common theme in all the definitions is directing people towards an
objective. So it can be inferred to be the process of influencing followers lend their efforts
towards achieving an objective. Their study focused on three types of leadership styles,
namely; laissez‐ faire style, transactional leadership; and transformational leadership.
Laissez‐ faire style is the avoidant leader who may not care about the subordinates and is
non-productive. Transactional leaders focus mainly on the physical and the security needs of
subordinates, basically based on bargaining exchange or reward systems. Transformational
style on the other hand encourages subordinates to put in extra effort and to go beyond their
call of duty. They are motivated to perform beyond expectation. They continued to argue that
transformational leaders achieve the highest level of performance from followers given that
they are able to motivate them and increase their skills for creativity, innovativeness and
success.
Transactional and transformational styles of leadership are distinct. Gitonga (2016)
differentiated between transactional and transformational leadership. Whereas transactional
leaders achieve their leadership through discrete exchange transformational leaders achieve
their leadership through motivating and inspiring their follows to achieve exceptional
12
outcomes. Menguc, Auh, & Shih (2013) defines transformational leadership as a process
where leaders and followers participate in a mutual process of uplifting one another to higher
levels of motivation and morality. He argues that transactional leadership is less effective
compared to transformational leadership. Menguc et al. (2013) continue to argue that
improvements in transformational-leadership-based competencies should enhance
competitiveness.
Transformation leadership is more acclaimed than transactional leadership. Kaur (2012)
studied the difference between transformational and transactional leadership. The context of
the study was selected public and private sector banks in Chandigarh. He argued that a
positive perception of employees towards leadership behaviour (transformational and
transactional) puts in more effort in their duties when they get inspiration to shine their
performance and ensure both financial and non-financial rewards as required in return by
their leaders. He argued that leaders appraise, give feedback and coach their employees when
productivity is below expectation and reward them upon achievement of targets. According
to him, there are many mechanisms of motivating employees by their leaders which includes
being a role model, challenging them to take responsibility and ownership for their work and
understanding them. This kind of leadership, which is transformational in nature, he posits,
will identify and nurture talent. It has been argued that transformational leaders support their
followers to learn and develop as individuals by inspiring and encouraging them with a
handy range of behavioral and decision-making skills. Box and Miller (2011) studied the
benefits and effectiveness of transformational leadership in terms of leadership and the
training of leaders.
2.2.1 Innovation and Competitiveness
Leadership factors occupy a central role in the firms degree of innovation and creativity.
Lochomoruk (2014) argued that in today’s turbulent environment, creativity and innovation
was fundamental to achieve organizational success. She argued that it is the role of leaders to
tap creativity in organizations by establishing conducive environment for incubation and
delivery of creativity and innovation. Such innovation and creativity will enhance the firms
competitiveness. As Kaur (2012) argued, leaders are the promoters that establish and
13
manage the firms internal environment, culture and strategies that fuel sustained innovation,
creativity and organizational success.
For a firm to survive in the cut-throat global competition and environmental turbulence it
calls for an innovative approach so as to drive the organizations forward. This innovative
approach will turn innovative concepts into reality. Employees have a general tendency to
resist change in the face of turbulence and this can be managed through effective leadership
intervention which will secure a firms survival. She argued that a leader needs to clearly
communicate the organziational vision and strategic goals. Clearly formulated organizational
goals need innovative leadership to achieve maximum organizational success. It is the duty
of leadership to smell unexpected changes in the business environment and create innovative
strategies to cope with them (Lochomoruk, 2014).
Leadership and innovation are organizational processes enshrined in organizational decision
streams. It identified five forces of leadership and innovation which provide a model of
decision processes. The five forces of effective leadership are organizational skills and
capabilities, capacity to learn, capacity to listen, capacity to motivate, and capacity for
organizational innovation. He further argues that low innovation organizations are caused by
management. Top management sets the tone at the top, create the right decision making
climate and employee motivation. They lead by example as their mannerisms establish the
overall behaviour of the firm. Top management weaknesses, for instance, arrogance and
imperious style, permeate into the entire firm and inhibit learning and innovation (McMillan,
2010).
Sustained competitiveness is dependent on continuous product, service and process
innovation. They suggested that innovation and transformational leadership are related. Their
study found that transformational leadership was need in moments of a firms change since it
produces better outcomes for the firm as well as innovative processes and products. They
concluded by proposing that leaders who motivate their staff to identify with their team, and
create a positive team climate, not only maintain sustained innovation and creativity but
14
possibly motivate staff to exploit opportunities created by changes in the business
environment (Paulsen, Callan, Ayoko, and Saunders, 2013).
2.2.2 Strategy Implementation and Competitiveness
Several scholars have studied organisation leadership and implementation of strategy.
Katuse, Kiriri, and Kyalo (2016) studied the influence of organizational leadership and
strategy implementation. They argued that firms in all sectors are working hard to survive in
the face competition, surprising changes, globalization changes in technology among others.
Many companies spend a lot of time planning and formulating strategies but very poor at
implementation. Organizational leadership is critical to strategy implementation. Cater &
Pucko (2010) studies 172 Slovenian companies and reported that ineffective leadership was
the primary obstruction to strategy implementation. They further argued that adapting the
organizational structure so as to implement strategy positively influence performance of the
organization. Rajasekar (2014) suggested that for strategy implementation to succeed both
employees and all department need to be passionate about the process and that having the
people drive the agenda will have a positive impact on the strategy implementation.
Leadership is crucial both in managing through others people and assisting in the activities
required to ensure that firms manage with change in the every turbulent business
environment. Strategic leadership actions include defining the strategic direction of the firm,
developing controls, management of the firms resources, defining and managing culture and
ethical practices (Katuse, Kiriri, & Kyalo, 2016). These activities are key in implementation
of strategy and leaders who practice them will pride in effective strategy implementation and
enhance organizational performance (Gumusluoglu & Ilsev, 2009).
One of the most critical responsibilities of leadership is to motivate employees in a firm.
Motivation is fundamental for improved employee performance. The leadership must be a
vibrant force in motivating employees involved in implementation of strategy. They must
comprehend the process of employee motivation which includes understanding the
employees needs which are diverse and the effort the employees employ to meet such needs.
Understanding the employees needs will influence the kind of motivation for that particular
15
employee. Human needs are continues, so is motivation. There must be a deliverable
leadership process of identifying emerging employee needs and creating mechanisms to
satisfy them either through monetary or non-monetary ways. Leader must design innovative
employee motivation strategies to enhance employee performance (Katuse, Kiriri, & Kyalo,
2016).
Organizational leadership involves directing the firm to manage constant change, which
requires top leadership to embrace change by re-assessing strategic intent, building their
firms and influencing the firms culture to align with the challenges and opportunities coming
along with change. In addition top leadership is availed with the required skills to enable
them cope with continuous change which calls for visionary and operational leadership. They
continue to argue that the leaders education, principles and perseverance are the critical
building blocks for organizations in today’s business world which are keenly watched by all
stakeholders. Firms are more effective and successful if leaders lead and show their followers
what they are supposed to do by example (Pearce & Robinson, 2013).
Leadership carries a significant sway in the success of strategy implementation. In their
study, Katuse, Kiriri and Kyalo (2016), concluded that a firms top leadership play critical
roles in strategy implementation, for instance, coming up with strategic plans, giving
direction and support and ensuring they are properly implemented. The leaders ensure that a
proper monitoring and evaluation system is embedded within the strategic plans for constant
feedback on strategy implementation. A firms leadership coordinates the entire process from
strategic planning through implementation up to evaluation and monitoring. Their study
found out that poor leadership is a disaster to strategy implementation. The reverse is true.
2.3 Technology and Competitiveness
Technology has attracted numerous definitions. White and Bruton (2011) define technology
simply as “the practical implementation of learning and knowledge by individuals and
organizations to aid human endeavor. Technology is the knowledge, products, processes,
tools, and systems used in the creation of goods or in the provision of services” (p. 15). They
argue that technology enhances a firms communication and pushes it to lower costs and
16
increases outsourcing. Technology is billed as a major driving force for organizational
success (Antoniou & Ansoff, 2007). Sarvan, Durmuş, Köksal, Başer, Dirlik, Atalay &
Almaz, (2011) argued that the real power of organizations with respect to competitiveness
depends on their ability to create knowledge and access to information. We shall therefore
focus on those two areas, namely; Research and Development (knowledge creation) and
access to information (information communication technology) and link them to
competitiveness.
2.3.1 Research and Development and Competitiveness
Research and development (R&D) plays an important role to a firms competitiveness.
According to Hagedoorn (2002) R&D refers to the programs and activities devoted to
devoted to growing scientific or technical knowledge and then applying that knowledge to
the development of new and improved processes and products. OECD (1993) defines R&D
as comprising of creative work done on a systematic basis so as to increase the stock of
knowledge, particularly knowledge of man, culture and society, including the utilization of
this stock of knowledge to develop new applications. Accordingly, R&D brings to fore and
fuels a firms innovative capability.
The criticality of R&D in optimizing utilization of the firms resources and capabilities has
been studied. Tsoukatos, Psimarni-Voulgaris, Lemonakis, and Vassakis (2017) argued under
the resource-based view (RBV) of the firm, an organizations primary goal is profit
maximization through augmenting and taking advantage of its resources and capabilities
(Tsang, 2000). How a firm can create value through knowledge creation and information
access will go a big way in determining its competitiveness. They suggested that innovation
encompasses changes in management and organizational responsibilities, creating new
customers and markets and products and services, especially creative ventures of knowledge
and information. Innovation is essential in order for firms to enhance their ability to absorb
new technology and knowledge developed either at a firm or industry level. Vassakis,
Voulgaris, Xekardakis, & Lemonakis (2015) argued that innovation and knowledge are
considered essential factors for a firms survival and success. Both tangible and intangible
R&D expenditures and investments in innovation positively affect the competitiveness of a
17
firm. Reguia (2014) described innovation as the discovery of an idea that will steer the
business to competitiveness if well implemented.
A firm with highly educated and knowledgeable employees is likely to have a higher
absorptive ability that is accessing, creation and implementation of new knowledge thus
enhancing the firms competitiveness in its market place. According to Faria and Barbosa
(2013) an organizations investment in innovation and technology enhances its knowledge
capability while absorbing externally derived knowledge (Faria & Barbosa, 2013).
Additionally, new innovations and technology are industry specific determined by the degree
of an organizations capacity to absorb technological enhancements and innovation (Bobillo,
Rodriguez & Tejerina, 2006).
Organizations have to compete along parallel avenues, for instance, developing and
implementing new services and products, designing proper marketing strategies,
development of uncharted markets (Singh, Garg, and Deshmukh, 2010). Then it can be
argued that it is how a firm maximizes the resources and capabilities at its disposal to design
new knowledge and innovation that will make it compete and survive in the turbulent
environment. Love, Roper, & Du (2009) argued that innovation and creativity is key to a
firms entry, survival and growth in the market. Consumer tastes and preferences and their
needs and wants are evolving by the minute augmented by heightened globalization and
technological advancement. The changing needs and wants are progressively manipulating
the principles of competitive paradigms (Tsoukatos et al., 2017) and calling for a more
responsive and technologically advanced firm in order to survive. Faria & Barbosa (2013)
suggested that innovative organizations increase their competitive advantage through
establishing a temporary monopoly power and generating profits from exploiting advantages
born out of their reputation, superior learning capabilities and economies of scale.
R&D is central to a firms innovativeness. Filippetti (2011) in his examination of the role of
design and R&D as a source of innovation, found out that besides design, R&D was a source
of a firms innovation. Koellinger (2008) using a conceptual framework examined the
correlation of innovation, technology and firm performance and found a positive correlation
18
between innovation and turnover and employment growth. Tsoukatos et al. (2017) noted that
R&D activity is a major internal source of knowledge and major determinant of an
organizations competitiveness. To understand the different strategy types and effect on a
firms performance it is key to distinguish between product and process innovation
(Bogliacino & Pianta, 2010).
Product innovation provides competitiveness through new and improved products while
process innovation provides competitiveness through efficient manufacturing and production
systems and procedures. Muthoni (2017) argued that product innovation is critical for a firms
competitiveness in the market space through creation of a more powerful product than the
exisiting one. Kanagal (2015) noted that product innovation is required for a firm to deal with
competitive pressures, short product life-cyles, consumer tastes and preferences, customer
needs and wants, changing demand patterns and advancement in technology. According to
Stawicki (2010) product innovation is a tool firms use to deal with competition and introduce
new products to the market, expand market share and obviate the need to compete on price
alone. Product improvements can be used to develop new interests to counter declining
interest in already existing products (Meyer & Thu Tran, 2006).
Process innovation favourably modifies the firms production process to create new
manufacturing techniques, administration procedures for the betterment of the entire
production and management process (Muthoni, 2017). Through process innovation a firm
increases efficiency and cuts down on costs while improving the product features.
O’Sullivan & Dooley (2009) noted that process innovation targets a firms operational
activities which create the firms competitiveness through product quality improvement and
efficiency in product distribution in the market. Since process innovation has the effect of
lowering a the product cost the firm can gain competitiveness through offering the product to
the market at an efficient price to the benefit of both the firm and the customer (Muthoni,
2017).
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2.3.2 Information Communication Technology and Competitiveness
Information Communication Technology (ICT) has been defined by several scholars. Rouse
(2013) defined ICT as an umbrella word that includes any communication application or tool,
including television, radio, cellular phones, computer and network software and hardware,
satellite systems and the several applications and services related to them, for instance, video
conferencing and distance learning. Okauru, (2010) defined ICT as the digital utilization and
processing utilization of data and information using electronic computers. Tan, Chong, Eze,
& Lin (2009) defined ICT as use of Information and Communication Technology devices
including computer network, hardware and software required for internet connection.
Akinfolarin & Rufai (2017) noted that despite the various scholarly definitions of ICT it can
be defined as the use of modern technological equipment to enhance effective
communication or ensure effective information flow in an organization.
The effect of ICT on profitability of a firm has been studied. In their study, Mithas, Tafti,
Bardhan, and Goh (2012), found out that ICT had a positive impact on a firms profitability
through enabled revenue growth. They proposed three reasons to explain why overall ICT
investments were like to positively affect a firms profits. First, with a firms continuous
investment in ICT the firm can maintain a more proactive digital posture and benefits from
the learning thus becoming better at managing ICT. Second, such continuous investment and
experience in ICT benefits the firm with respect to improving the firms capacity to leverage
from information and strengthen organizational capabilities such as improved customer
satisfaction and reduced marketing spend. Their third explanation was that due to possibly
exhausted production cost reduction as a result of process automation, revenue growth driven
by ICT through differentiation may be more promising for the firm. They posited that IT
investments enhance revenue growth through new marketing and distribution channels, new
value propositions and better management of the customer life cycle.
In today’s era of technological advancement and economic globalization acquiring ICT to
support business operations is a fundamental increasing the firms competitiveness. Firms
must be capable of adopting and adapting new technologies. They need to stay ahead of
20
change and constantly upgrade themselves by learning, re-learning and upgrading their skills
in ICT knowledge to improve on product quality and market share (Hashim, 2007).
The impact of ICT on an organizations performance is establishment of more effective
processes leading to development of higher quality products (Vinas, Bessant, Perez, &
Gonzal, 2001). Gordon and Tarafdar (2010) argued that firms promoting R&D invested
heavily on ICT since these systems decrease coordination costs and enhance firms capacity
to conduct R&D activities more efficiently. Therefore, according to Tsoukatos et al., (2017)
the efficient execution of Total Quality Management (TQM) can significantly increase
competitiveness. In the same stance, inadequate investment in ICT can act as a significant
barrier to a firms competitiveness since such a firm does not invest in the development of
expensive Enterprise Resource Planning (ERP) systems (such as SAP) to seamlessly manage
the firms operations.
2.4 Product Marketing and Competitiveness
The impact of product marketing on competitiveness is another area that has received wide
research. Armstrong and Kotler (2015) observed that marketing is meeting customer needs.
They argued that marketing has evolved beyond the traditional advertising and selling
activities. They introduced this 12 edition of the book by noting that marketing starts with
comprehending customer needs and wants, making a decision as to which target markets the
firm can serve best, and establishing a convincing value proposition by which the firm can
attract, maintain, and grow targeted consumers.
It involves building a deep consumer relationship and securing the firms brand as part of the
consumers conversation. With advanced technology and digitization, in addition to the
traditional marketing approaches marketers can access an incredible set of new customers
relationship-building tools be they smartphones, social media, tablets among other tools – for
real time engagement with consumers regardless of the place and time. They proposed that if
marketers make use of these important marketing tools and techniques then they will reap
enormous rewards with respect to market share, profits, and customer equity. They defined
21
marketing as the process whereby firms create value for consumers and build strong
consumer relationships so as to capture value from consumers in return.
To the extent that a firm can differentiate and position itself as providing superior consumer
value, it generates competitiveness. Further, Armstrong & Kotler (2015) posit that the four Ps
of marketing mix (being the Product, Price, Promotion and Place) comprises of tactical
marketing tools combined into an integrated marketing package that actually delivers the
intended value to target consumers. Their book is heavy on the concept of value. To cultivate
profitable relationships with target consumers, a firm must comprehend consumer needs and
deliver more value than competition.
Marketing can be seen from different perspectives. Ouma (2012) argued that it should be
seen from the environment or conditions from which it is operating since this affects the kind
of marketing mix to be employed. She posits that marketing involves understanding
customers’ needs and wants and providing it to them at a profit. She underscores the
customer orientation and commercial process of marketing. It therefore entails identifying
consumers, understanding their needs and satisfying those needs profitably. She further
defines marketing as a series of interconnected activities involving a series of services
starting with production to consumption of products. According to her, marketing is a both a
managerial and social process because there must be interaction between the buyer and the
seller and it involves certain management functions. She summarizes by observing that
marketing systems are dynamic and involve constant improvement and change.
Globalization has made the world borderless and heightened competition since local firms
can feel the weight of global competition at home (Ohmae, 2005). Consequently,
organizations need to re-strategize to counter these globalization forces (Kariuki, 2015). This
means organizations managers should focus on the globe as a unified market and not on
countries as individual markets (Tsiotsou & Goldsmith, 2012). The changing global
environment coupled with improved technology significantly affects how firms develop their
marketing strategies (Bertoli & Resciniti, 2012).
22
2.4.1 Advertising and Competitiveness
Advertising helps a firm communicate with its target customers. Armstrong and Kotler
(2015) noted that advertisement can be traced back to the very beginning of recorded history.
They argued that a firm must make four key decisions when coming up with an advertising
program, namely; put down the advertising objectives, come up with the advertising budget,
establishing the advertising strategy, and assessing advertising campaigns. Hansen &
Christensen (2003) defined advertising as any method of non-personal message and
promotion of goods, services and ideas. It is any form of communication that delivers
message to target consumers about a firms products and services.
The role of advertising in ensuring a firms competitiveness is critical. Manickam (2014)
observed that the role of advertising is expanded in today’s competitive business world, as
firms allocate huge sums of money to build brands, identify, target, reach, and influence
target customers to consume their services or products. It has the role of awareness creation,
provision of required information to the target customers and improving the product
knowledge leading to purchase by the customer. Advertisement has been described as a
marketing strategy tool utilized by firms to positively influence a customer’s buying decision
towards the firms brand (Tan & Rashad, 2014).
There are different tools of advertising. Manickam (2014) further argued that firms employ
different advertising tools to communicate and it is critical to carefully identify the impact
and role of the advertising tools for effectiveness in reaching the target customers. The firm
may employ a mix of traditional marketing tools and the modern marketing tools. Traditional
media include printed media advertisements, broadcast on radio and television, outdoor
billboards, brochures among others. The major traditional media include face-to-face or
personal selling, direct-mail marketing, catalog marketing, telemarketing, direct-response
television (DRTV) marketing, and kiosk marketing (Armstrong & Kotler, 2015). Driven by
the predominance of technology social media advertisement is now taking center stage.
According to Golden (2011) social media marketing utilized pull techniques to interest
consumers based on the attraction of consumer due to good content hence it allows them to
23
engage. Traditional marketing pushes the firms products to the potential consumers through
the traditional media tools. According to Scott (2010) social media has also opened a
remarkable opportunity for firms to directly reach target customers with targeted messages
that are much less costly than traditional marketing media.
Advertising is becoming more complicated than ever. Owing to digitization customers are
well informed and more empowered. Rather than depending on marketer supplied
information, they can utilize the Internet, social media, and other technologies to discover the
information on their own. The can easily connect with other consumers online on a real time
basis and exchange product information (Armstrong & Kotler, 2015). Although traditional
advertising media remain useful, their importance is waning. The changing dynamic in the
advertising world invite innovative advertising strategies as social media like Facebook,
Instagram, WhatsApp and others have taken the market by storm. Firms need to creatively
integrate the various advertising to optimally enhance the firm brand image. Growth in the
firms brand improves the firms competitiveness as it translates to additional sales and market
share.
2.4.2 Differentiation and Positioning and Competitiveness
Differentiation calls for a firm to be unique in its industry in its offering to the consumers.
Armstrong and Kotler (2015) observed that beyond deciding on the target market the firm
must first decide its value proposition—that is how it will build differentiated value for niche
consumers and what positions it aims to occupy in those segments. A product position is the
way a product or service is defined by customers on key characteristics — the place the
product or service occupies in the customers minds relative to those of competitors. They
further argued that to develop profitable relationships with target consumers, a firm must
understand consumer needs and deliver better customer value than competition. To the extent
that a firm can differentiate and position itself as offering superior customer value, it gains
competitiveness.
The foremost literature on differentiation is provided by Porter (1985) where he notes that
differentiation involves the creation of a product or services that is perceived throughout its
24
industry as unique. Differentiation is one of Porter’s generic strategies alongside cost
leadership and focus. Based on the product uniqueness, the firm may charge a premium on
the service or product. Examples here are unique designs, unique features, customer service,
brand image, technology among others (Tanwar, 2013). According to Porter (1985),
differentiation is a viable strategy for making above average returns in trading since with
increasing brand loyalty, price sensitivity decreases. Customer loyalty can also act as barrier
to entry for new organization who must develop their distinctive uniqueness to compete
successfully. According to Porter (1992), a differentiation strategy doesn’t mean that a firm
ignores costs but rather costs are not the main strategic target. There a firm that can attain and
sustain differentiation becomes highly competitive if its price premium surpasses the
marginal cost suffered in achieving uniqueness. This is underscored by Robinson (2015) who
observes that a successful differentiation strategy permits a firm to provide a product of
perceived greater value to consumers at a “differentiation cost” lower than the “value
premium” to consumers.
Firms must more than ever analyze their brand position in the market. Elzinga and Rodgers
(2008) argued that as product varieties become more crowded and marketing budgets get
more suppressed firms must rethink the strategy to brand positioning. They posit that creating
a compelling and differentiated brand positioning can bring form that difference between
blasé market performance and blockbuster. Their definition of positioning includes deep
understanding of customer needs, a well-defined target market and a unique point of
differentiation. According to them these key elements are reflected in a concise depiction that
shows the benefits delivered by the brand to provide emotional connection and persuasion to
the consumer to make a purchase decision swayed by the power of the brand. They clarify
their argument by noting that a good brand positioning stipulates a clear target market,
defines the product and its purpose, and avails a distinctive reason to the consumer to trust
the benefit projected is real. This will improve a firms performance in the industry relative to
the competitors.
Firms pursuing a differentiation strategy endeavor to develop and market unique products
and services for wide-ranging customer segments. They intent to deliver a superior
25
satisfaction of consumer needs in one or numerous product or service features and cultivate
customer loyalty which will allow the firm to charge a premium price for the product or
service (Morshett, Swoboda, & Schramm-Klein, 2006).
Porter’s generic strategies is another subject that has been well studied. Ouma and Oloko
(2015) studied the relationship between Porter’s generic strategies and competitive
advantage. They focused on bus companies plying the Kisumu-Nairobi route in Kenya. They
argued that the generic of differentiation strategy comprises of developing a market position
that is seen as being unique and sustainable in the industry over the long run. As Porter
(1985) stated, they posit that competitive strategies entail the creation of attributes that
characterize a firm and differentiate its offering and value proposition in comparison to that
of competition in the market. Their study found out that the introduction of a wide range of
differentiated products and services makes the firm more attractive thus giving it
competitiveness against its rivals.
2.5 Chapter Summary
This chapter has discussed the effect of leadership factors on competitiveness with a focus on
innovation and strategy implementation; the effect of technology on competitiveness with a
focus on research and development and information communication technology and the
influence of product marketing on competitiveness with a focus on advertising,
differentiation and positioning. Numerous relevant literature has been reviewed in those
areas. The next chapter focuses on the research design and methodology used in collecting
the data.
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CHAPTER THREE
3.0 RESEARCH METHODOLOGY
3.1 Introduction
This chapter presents the research method used to carry out the research in order to attain the
objectives of the study. It focuses on the research design, population and sampling design,
data collection methods, research procedures, data analysis methods and presentation.
3.2 Research Design
A study research design is the planned structure that clearly demonstrates how the researcher
proposes to carry out the numerous activities of the study in order to satisfy the objectives of
the study in an orderly way. Cooper and Schindler (2014) defined research design as the plan
and strategy constructed so as to enable the researcher to thoroughly answer the research
questions. According to Babbie (2015) it is a the comprehensible design that outlines the
ways in which data is collected and examined and results be obtained.
This study employed a descriptive survey research design. According to Creswell (2014) a
descriptive research design collects information that concerns the current status of the
occurrence and describes what exists with regards to the variables in a particular situation.
Saunders, Lewis and Thornhill (2016) state that a descriptive design includes case study,
correlational design and survey. In a survey, the sampled respondents give answers to the
questions of interest either through face-to-face interview, questionnaire or telephone
interview. Therefore in order to effectively examine the factors affecting competitiveness of
Savannah Cement in Kenya, a descriptive design helped in offering a description of the three
dimensions of leadership factors, technology, and product marketing and how they affect the
competitiveness of SCL in Kenya. This design was used due to the fact that it supports
studies that establish the relationship between study variables and it is very effective in the
collection of detailed information.
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3.3 Population and Sampling Design
3.3.1 Population
Population is the total collection of elements with common observable characteristics that the
researcher plans to collect data that will be used to make conclusion on the population after
the data analysis (Cooper & Schindler, 2014). According to Saunders, Lewis and Thornhill
(2016) a population is the universe of place, people or things to be examined. The target
population of interest in this study consisted of all employees of Savannah Cement Limited
in Kenya which currently stands at 168 employees. Table 3.1 shows the study population
distribution.
Table 3.1: Population Distribution
Department Population Size Percentage
Finance 35 21%
Procurement 4 2%
Internal Audit 2 1%
Security 3 2%
Human Resource and Administration 9 5%
Executive Office 2 1%
Safety, Health and Environment 1 1%
Manufacturing 80 48%
Sales and Marketing 32 19%
Total 168 100%
Source: Savannah Cement Limited (2018)
3.3.2 Sampling Design
The sampling design is the sampling frame, sampling technique and the sample size that will
be used in the study. These are discussed under the following sub-topics.
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3.3.2.1 Sampling Frame
Sampling frame is the complete list of all the items in the target population from which the
study obtains a sample (Saunders et al., 2016). In this study, the list constituted all 168
employees of Savannah Cement Limited in Kenya as established as at June 2018. This list
was obtained from SCL human resources department.
3.3.2.2 Sampling Technique
There are various types of sampling techniques. Cooper and Schindler (2014) explained
sampling technique as the approaches in which the sample will be selected from the
population. This study adopted stratified random sampling technique by dividing the
population into different groups/ strata. This technique was used as it ensured that all
individual groups or strata are represented in the sampling process and fairly represents the
population on particular characteristics (Saunders et al., 2016). This sampling technique as
noted by Cooper & Schindler (2014) gives chance of selection for the entire target population
so that the outcome could be generalized. The population in this study was grouped based on
the different departments as shown in Table 3.2. Within each department or strata, individual
employees were selected using simple random sampling.
3.3.2.3 Sample Size
Sample size is a smaller set of the entire population (Cooper & Schindler, 2014). The study
adopted Yamane (1973) statistical formula to choose an appropriate sample size from the
population since the population is known (finite). The formula at 95% confidence level was
used to determine the representative sample size from the different departments of Savannah
Cement Limited as follows:
n=N/(1+ Ne2)
Where:
n = the required sample size
N= size of the population
E = alpha level, that is, allowable error e = 0.05 at 95% level of confidence
n=168/(1+168(0.05*0.05))=168/1.42 = 118
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The study utilized a sample size of 118 employees of Savannah Cement Limited which was
proportionately allocated based on the population size of each strata as shown in Table 3.2.
Table 3.2: Sample Size Distribution
Department Population
Size
% Sample Size (using
proportional allocation
procedure)
Sample Size
Finance 35 21% 25
Procurement 4 2% 3
Internal Audit 2 1% 1
Security 3 2% 2
Human Resource and
Administration
9 5% 6
Executive Office 2 1% 1
Safety, Health and Environment 1 1% 1
Manufacturing 80 48% 56
Sales and Marketing 32 19% 22
Total 168 100% 118
Source: own computation
3.4 Data Collection Methods
Data collection method is described as the gathering of data for the purpose of conducting an
analysis on it to come up with inferences from the data (Cooper & Schindler, 2014). A
structured questionnaire was adopted in this research as a method of collecting primary data.
Saunders et al., (2016) observed that a questionnaire is generally an appropriate tool for
standardized questions to avoid misunderstanding as well as appropriate for descriptive study
as it allows the examination of the perceptions of respondent with respect to the study
variables.
The questionnaire comprised of closed ended questions, checklist questions and five point
Likert (1932) scale ranging from 1 – 5 where 1 = Strongly Disagree (SD), 2 = Disagree (D),
3 = Neither (N), 4 = Agree (A) and 5 = Strongly Agree (SA). The design of the questionnaire
included four parts with the first part containing questions on the background and
30
demographic information of the respondent while the other three parts captured questions
relating to the study objectives.
3.5 Research Procedures
Research procedure provides the researcher a better understanding of the specific concepts
(Ogwang, 2017). This study was carried out in a systematic process so as to ensure reliability
of the final output of the research. The researcher sought permission from management of
Savannah Cement Limited through the dean school of business, USIU-A. This facilitated
accessibility to the respondents of the study. A pilot study was carried out to test the
reliability and validity of the questionnaire. According to Sekaran & Bougie (2016) a pilot
test is important for validity of a study and reliability of a research instrument. In the pilot
study data was collected from 20 respondents drawn from all strata proportionate to the
population distribution. The pilot study enabled the researcher to modify the questionnaire so
as clarify ambiguous questions and eliminate irrelevant questions.
The actual study was conducted after adjusting the questionnaire in line with pilot test. The
researcher coordinated with human resource management at Savannah Cement Limited to
facilitate data collection through a drop and pick method. This helped to guarantee a high
response rate because respondents had ample time to give their responses.
3.5.1 Validity and Reliability
Validity refers to an extent to which a concept is adequately measured in a quantitative study
while reliability refers to consistent accuracy of an instrument used in the measurement.
Therefore a validity and reliability test is used to measure the consistency of responses across
all questions utilized in the research questionnaire.
A pilot study to pretest validity and reliability of the research instrument was done using
respondents from Savannah Cement Limited. The data gathered from the questionnaires were
tested using Cronbach’s alpha test. Bougie, 2016 notes that the Cronbach’s alpha test
measures the degree to which the internal scale is consistent and dependable whereby the
31
Cronbach’s coefficient having a value of 0.7 or higher is considered adequate. The
Cronbach’s alpha test also indicates where the research questionnaire items measures the
same concept and if not which items can be deleted to improve the consistency of the
research questionnaire. The pilot test questionnaire included socio-economic factors as a
fourth objective but this was excluded in the actual study. The tables 3.3 present the results of
the reliability test.
Table 3.3: Overall Reliability Statistics
Reliability Statistics
Cronbach's Alpha Cronbach's Alpha Based on
Standardized Items N of Items
0.876 0.873 4
Table 3.4: Item Total Statistics
Scale Mean if
Item Deleted
Scale
Variance if
Item Deleted
Corrected
Item-Total
Correlation
Squared
Multiple
Correlation
Cronbach's Alpha if Item
Deleted
General
Information 10.7436 3.838 0.382 0.254 0.91
Leadership
Factors 10.3959 2.663 0.801 0.646 0.83
Technology 10.224 3.674 0.547 0.414 0.81
Product
Marketing 10.2424 2.817 0.63 0.472 0.86
From the overall reliability statistics table the Cronbach’s alpha test was found to be optimal
since the coefficient value was above 0.7. This meant that the scales used to measure the
variables were consistent and reliable.
32
3.6 Data Analysis Methods
Data analysis is the process of examining, sanitizing, converting and analyzing data collected
in a study. The research utilized both qualitative and quantitative techniques (Miles,
Huberman, & Saldana, 2013). Both descriptive and inferential statistics were used to analyze
the data obtained from the research. Descriptive statistics was used to determine the
frequency and percentage distributions, standard deviations and mean (Cooper & Schindler,
2014). Cross tabulations were utilized to analyze categorical data like gender of the
respondents.
Inferential statistics refers to the use of complex computations, for instance, correlations, chi-
square tests, regression models, Analysis of Variance (ANOVA) among others. Pearson
correlation was utilized to measure the relationship between the effect of leadership factors,
technology and product marketing on competitiveness of Savannah Cement Limited in
Kenya. One-Way Analysis of Variance (ANOVA) was used to determine the significant
differences between the mean scores by gender and years of employment. Linear regression
analysis was used to test the statistical significance on the relationship between the
independent variables (the effect of leadership factors, the influence of technology and the
influence of product marketing) and the dependent variable (competitiveness of Savannah
Cement Limited in Kenya).
3.7 Chapter Summary
This chapter has presented the research methodology that was used in the study. It includes
the research design that guided the collection and analysis of data, the target population of
the study, the sampling and sampling procedures, data collection methods, research
procedure and data analysis and presentation. The next chapter focuses on the study results
and findings.
33
CHAPTER FOUR
4.0 RESULTS AND FINDINGS
4.1 Introduction
This chapter presents the analysis of the primary data collected from the administered
questionnaires. In order to give insight and understanding of the various aspects the study
made use of Pearson’s correlation coefficient and regression analysis. Pearson’s correlation
coefficient method was used to identify whether there was a relationship between the
variables and whether it was a negative or positive relationship. It was also used to determine
the magnitude of the relationship. Regression analysis was used to identify how much
variation of competitiveness was explained by the factors, whether the models used to predict
competiveness were significantly fit and if they were by what values did they predict
competiveness. The results of the findings were then presented.
4.2 Response Rate and Background
The study collected information on various aspects affecting the competitiveness of SCL.
They were broadly categorized into background information, leadership factors, technology
and product marketing. All elements were analyzed, and all the result findings presented.
4.2.1 Response Rate
The research questionnaire was administered to 118 employees of Savannah Cement
Limited. All the questionnaires were duly filled. The response rate was therefore 100%.
According to Mugenda (2003), in research a response rate of 50 percent is adequate for
analysis and reporting; a rate of above 60 percent is excellent. This research, therefore, had
optimal data for analysis and drawing of inference. The response rate is shown in table 4.1
below.
34
Table 4.1: Response Rate
Response Rate Frequency Percentage
Complete 118 100
Incomplete 0 0
Total 118 100
4.2.2 Background Information
One of the most important aspects for any research is to determine the background
information. As such the study collected key aspects of respondents background information
that included; age, gender, level of education, length of time working for the company,
department of work and departmental position of management. The results were analyzed
and presented in the form of descriptive statistics.
4.2.2.1 Age of Respondents
The study first sought to determine the age of the respondents. It was established that 53.4%
of the respondents were aged between 26-35, 22% were in the 36-45 age bracket, 14.4% of
the respondents were aged between 46-55 years of age, 6.8% of the respondents were below
25 years of age while 1.7% of the respondents were above 55 years of age. The findings of
the data are as presented in figure 4.1.
Figure 4.1 Ages of Respondents
35
4.2.2.2 Gender of Respondents
The study also collected information on the gender of its respondents. From the findings it
was established that a majority of the respondents were male accounting for 64% of the total
respondents while females constituted 36% of the respondents. Figure 4.2 presents the results
of the study.
Figure 4.2: Gender of Respondents
4.2.2.3 Level of Education
The study asked respondents to identify their various highest levels of education. The
findings revealed that 47.5% of the respondents had attained a graduate level, 21.2% had
attained diploma level, 18.6% had attained post graduate level while 12.7% had attained
other levels of education other than the ones pre-identified by the study. Figure 4.3 presents
the findings.
36
Figure 4.3 Highest Education Level of Respondents
4.2.2.4 Experience in Years
The respondents were also asked to identify the length of time they had been working for the
company. From the results the study determined that the quite a good number had worked in
the company for a considerable length of time, that is, 33.9% of respondents had worked in
the company for 5 years and above, 30.5 % above 3 - 4 years, 18.6% above 2-3 years, 13.6 %
between 1-2 years while 0.8% for less than a year. The findings of the study are as shown in
figure 4.4.
37
Figure 4.4 Experience in Years
4.2.2.5 Department of Work
The study also sought to find out the different departments in which the respondents worked.
The study established that; 39.8% of the respondents were from the manufacturing
department, 25.4% from finance department, 16.1 % from sales and marketing department,
5% from other departments other than the ones pre-identified by the study, 4.2% from human
resource and administration department, 3.4 % from security, 2.5 % from procurement
department, 1.7% from security health and environment department, while 0.8% were from
executive and internal audit departments respectively. Figure 4.5 presents findings of the
study.
38
Figure 4.5 Departments of Work
4.2.2.6 Departmental Position of Management
The study also asked respondents to indicate their various positions of management they
occupied in the various departments. From the findings it was determined that 41.5% of the
respondents had a non-managerial position, 25.4% were in lower management, 13.6% of the
respondents were in middle management while 7.6% were in top management.
Unfortunately, 11% of the respondents failed to indicate their departmental position of
management. The results of the study are as presented in figure 4.6.
39
Figure 4.6 Departmental Position of Management
4.3 Leadership Factors and Competitiveness of Products
Under this section of the study the research sought to examine how various leadership factors
affected competitiveness of Savannah Cement Limited. In order to gain insight into these
factors the study employed the use of a Likert scale to rate the respondents’ feelings. The
Likert scale was divided on a 5 point scale, where: 1-Strongly Disagree, 2-Disagree, 3-
Neutral, 4-Agree, 5- Strongly Agree. The results are tabulated in table 4.2.
40
Table 4.2: Leadership Factors
Statement
Strongly
Disagree Disagree Neutral Agree
Strongly
Agree
Total
The company leadership style has
enabled it perform well in the market 11% 15.30% 19.50% 42.40% 11.90%
100%
The company leadership encourages
the employees to participate when it
comes to decision making time and
tries to implement their ideas and
suggestions 15.30% 25.40% 29.70% 19.50% 10.10%
100%
The company leadership inspires and
motivates the employees to deliver
world class results 12.70% 24.60% 22% 28.80% 11.90%
100%
The company leadership encourages
innovation and creativity of its
employees 9.30% 33.90% 22.90% 20.30% 13.60%
100%
There is a positive relation between
innovation and competitiveness of the
company 6.80% 15.30% 23.70% 43.20% 11%
100%
The company leadership is keen on
nurturing and developing the company
employees 14.40% 27.10% 26.30% 20.30% 11.80%
100%
The company leadership quickly
adapts to change and new realities in
the market 15.40% 23.10% 27.40% 24.80% 9.40%
100%
The company leadership has been
successful in Savannah Cement Ltd
strategy implementation 6.80% 21.20% 30.50% 31.40% 10.10%
100%
There is a positive relation between
leadership and competitiveness of the
company 6.80% 13.60% 26.30% 39.80% 13.50%
100%
More than 50% of the respondents agreed and strongly agreed that the company leadership
style has enabled it perform well in the market, that there is a positive relation between
innovation and competitiveness of the company, and that there is a positive relation between
leadership and competitiveness of the company.
However, a majority of the respondents (more than 50%) were either neutral or
disagreed/strongly disagreed that the company leadership encourages the employees to
participate when it comes to decision making time and tries to implement their ideas and
suggestions, that the company leadership inspires and motivates the employees to deliver
world class results, that the leadership encourages innovation and creativity of its employees,
41
that the company leadership is keen on nurturing and developing the company employees,
that the company leadership quickly adapts to change and new realities in the market, and
that the company leadership has been successful in Savannah Cement Ltd strategy
implementation.
In addition, the mean and standard deviation of the factors considered under leadership were
computed. The results are presented in Table 4.3.
Table 4.3: Mean and Standard Deviation of Leadership Factors and Competitiveness
Statement N Mean Std. Deviation
The company leadership style has enabled it perform
well in the market 118 3.54 0.2983
The company leadership encourages the employees to
participate when it comes to decision making time and
tries to implement their ideas and suggestions
118 2.82 0.1193
The company leadership inspires and motivates the
employees to deliver world class results 118 3.81 0.8959
The company leadership encourages innovation and
creativity of its employees 118 2.91 0.1191
There is a positive relation between innovation and
competitiveness of the company 118 4.16 0.887
The company leadership is keen on nurturing and
developing the company employees 118 2.86 0.1224
The company leadership quickly adapts to change and
new realities in the market 118 3.68 0.9043
The company leadership has been successful in
savannah cement ltd strategy implementation 118 3.95 0.8965
There is a positive relation between leadership and
competitiveness of the company 118 4.18 0.8945
The table above shows the mean and standard deviation of the various ratings that the
respondents gave statements connected leadership factors. The mean indicate the attitudes of
the ratings while the standard deviation measures how far-fetched the statement was from the
ratings.
The respondents agreed (3.54<mean<4.18) that the leadership styles enable it perform well
with a mean (3.54), leadership quick adaptation to new market realities with a mean (3.68),
leadership inspiration and motivation with a mean (3.81), leadership success in strategy
42
implementation with a mean (3.95), positive relation between innovation and
competitiveness with a mean (4.16) and positive relation between the leadership and
competitiveness of the company with a mean(4.18) were some of the major ways through
which leadership factors influenced competitiveness.
However, the respondents were neutral(2.82<mean<2.91) on how leadership encouragement
of employees to participate in decision making time with a mean (2.82), leadership being
keen on nurturing employees with a mean (2.86) and leadership encouragement and
motivation of creativity and innovation of employees with a mean of (2.91).
4.3.1 Correlation Analysis of Leadership
Correlation analysis of leadership variables was contacted and results presented in Table 4.4.
The results reveal existence of both positive and negative relationship at different p values.
Table 4.3 below shows that competitiveness was positively correlated with leadership factor
variable: Leadership style(r=0.011, p=0.902), leadership adaptation(r=0.131, p value=0.158),
leadership strategic implementation success(r=0.131,p value=0.157), positive relation
between leadership and competitiveness(r=0.129,p value=0.164). Competitiveness was
negatively correlated with leadership factors; employee participation(r=-0.009, p
value=0.926), leadership inspiration(r=-0.004,p value=0.964),positive relation between
innovation and competitiveness(r=-0.011,p value=0.908), leadership nurturing (r=-0.12,p
value=0.894) and leadership encouragement on creativity and innovation(r= -0.31, p
value=0.741).
43
Table 4.4: Leadership Factors Correlation Analysis
4.3.2 Regression Analysis of Leadership Factors
The study conducted a regression analysis to help establish whether a relationship between
leadership factors and competitiveness existed. Table 4.5, Table 4.6 and Table 4.7 present the
findings from the study.
Table 4.5 Leadership Factors Model Summary
Model Summary
Model R R Square
Adjusted R
Square Std. Error of the Estimate
1 .085a 0.007 -0.001 5.43758
a. Predictors: (Constant), Leadership factors
Correlations
Leader
ship
style
Encourag
ement of
employee
s to
participat
e in
decision
time
Leadersh
ip
inspirati
on and
motivati
on
towards
employe
e
Leader
ship
encour
agemen
t on
innovat
ion and
creativi
ty
Positive
relation
between
innovati
on and
competit
iveness
Leadersh
ip keen
interest
on
nurturin
g
employe
es
Leadersh
ip quick
change
and
adaptatio
n to new
market
realities
Leadersh
ip has
been
success
in
strategy
impleme
ntation
Positive
relation
between
leadershi
p and
competit
iveness
of the
company
Competi
tiveness
Co
mp
etit
iven
ess
Pearson
Correlat
ion
.011 -.009 -.004 -.031 -.011 -.012 .131 .131 .129 1
Sig. (2-
tailed)
.902 .926 .964 .741 .908 .894 .158 .157 .164
N 118 118 118 118 118 118 117 118 118 118
44
From the model summary table above the study found the R Square to be 0.085. This R
Square implies that only 0.85% of the variability in competitiveness can be explained by
leadership factors.
Table 4.6 Leadership Factors Anova
ANOVAa
Model Sum of Squares Df
Mean
Square F Sig.
1 Regression 25.207 1 25.207 8.053 .0358b
Residual 3429.801 116 29.567
Total 3455.008 117
a. Dependent Variable: Competitiveness
b. Predictors: (Constant), Leadership factors
The Anova table above reveals F value=8.053 is greater than p value=0.0358. Therefore the
data provides sufficient evidence that a model with leadership factors as a predictor for
competitiveness was fit for predicting competitiveness.
Table 4.7 Leadership Factors Coefficients
Coefficientsa
Model
Unstandardized
Coefficients
Standardized
Coefficients
t Sig. B Std. Error Beta
1 (Constant) 4.549 0.622 7.312 0
Leadership
factors 0.073 0.79 0.085 0.923 0.0358
a. Dependent Variable: Competitiveness
45
The coefficients table above is useful in fitting a simple linear regression model between
competitiveness and leadership factors, thus helping explain the relationship between
leadership factors and competitiveness. From the table above the study established the model
fit was:
Y=4.549 +0.073X1+ε
Where Y=competitiveness, X1=leadership factors, ε=error term
The model fit shows that for every unit increase in leadership factors competitiveness goes
up by 0.073 units.
4.4 Technology and Competitiveness
With the aim of identifying whether technology influenced competitiveness the study
established major areas through which influenced could be exerted and asked respondents to
identify them. To gauge the respondents attitude towards the factors the study employed the
use of a five point likert scale where: 1-Strongly Disagree, 2-Disagree, 3- Neutral, 4-Agree,
5- Strongly Agree. The results are tabulated in the table 4.8.
46
Table 4.8 Technology and Competitiveness
Statement
Strongly
Disagree Disagree Neutral Agree
Strongly
Agree Total
The company uses the newest
technology in the production
process to remain competitive 9.30% 12.70% 17.80% 47.50% 12.70% 100%
The production process in the
company is quite effective and
efficient and helps the company
remain competitive 7.60% 26.30% 26.30% 32.20% 7.60% 100%
The company reviews its processes
from time to time to enhance its
competitiveness 5.10% 32.20% 28.80% 22% 11.80% 100%
The company has a robust research
and development function 35.60% 24.60% 22% 13.60% 4.20% 100%
The company has robust
information communication
technology (ICT) tools and systems 7.60% 12.70% 23.70% 41.50% 14.40% 100%
The company's ICT effectively
supports the company's processes
and operation 2.50% 12.70% 20.30% 50% 14.40% 100%
The company is keen on promoting
R&D and ICT 22% 20.30% 26.30% 24.60% 6.70% 100%
The company's R&D and ICT have
decreased the company's
coordination costs and enhanced its
capacity to conduct R&D 8.50% 21.20% 36.40% 26.30% 7.60% 100%
There is a positive relation between
technology and competitiveness of
the company 2.50% 8.50% 27.10% 46.60% 15.20% 100%
More than 50% of the respondents agreed and strongly agreed that the company uses the
newest technology in the production process to remain competitive, that the company has
robust information communication technology (ICT) tools and systems, that the company's
47
ICT effectively supports the company's processes and operation, and that there is a positive
relation between technology and competitiveness of the company.
A majority of the respondents (more than 50%) were, however, neutral or disagreed that the
production process in the company is quite effective and efficient and helps the company
remain competitive, that the company reviews its processes from time to time to enhance its
competitiveness, that the company's R&D and ICT have decreased the company's
coordination costs and enhanced its capacity to conduct R&D. In response to whether the
company has a robust research and development function and whether the company is keen
on promoting R&D and ICT, the respondents strongly disagreed at 35.6% and 22%
respectively.
In addition, the mean and standard deviation of the factors considered under technology were
computed. The results are presented in Table 4.9.
Table 4.9: Mean and Standard Deviation of Technology and Competitiveness
Statement N Mean Std. Deviation
The company uses the newest technology in the production
process to remain competitive 118 4.72 0.9624
The production process in the company is quite effective
and efficient and helps the company remain competitive 118 3.04 0.1086
The company reviews its processes from time to time to
enhance its competitiveness 118 3.02 0.1098
The company has a robust research and development
function 118 2.21 0.1138
The company has robust information communication
technology (ICT) tools and systems 118 3.41 0.1115
The company's ICT effectively supports the company's
processes and operation 118 3.6 0.965
The company is keen on promoting R&D and ICT 118 3.51 0.9023
The company's R&D and ICT have decreased the
company's coordination costs and enhanced its capacity to
conduct R&D
118 3.81 0.8973
There is a positive relation between technology and
competitiveness of the company 118 4.42 0.8904
48
The table above shows a summary of descriptive statistics in terms of mean and standard
deviation for technology. The respondents strongly agreed that the use of newest technology
in the production process with mean (4.72) was the major way through which technology
influenced competitiveness.
The respondents agreed (3.51 <mean<4.42) that promoting R&D and ICT with a mean
(3.51), ICT effectively supports the company process with a mean (3.6), R&D and ICT
reduction of company’s coordination cost and enhanced capacity to conduct R&D with a
mean (3.81) and positive relation between technology and competitiveness with a mean
(4.42) were other ways that technology affected competiveness.
The respondents were neutral (3.02<mean<3.41) on how the company reviews on its process
from time to time with a mean of (3.02), the production process in the company been quite
effective and efficient with a mean of (3.04) and the company has robust information
communication technology (ICT) tools and systems with a mean (3.41).
Additionally the respondents disagreed that the company robust research and development
function with a mean (2.21).
4.4.1 Correlation Analysis of Technological Factors
Technology variables correlated against competitiveness revealed that all variables were
positively and significantly correlated at 0.01 level. The results of the findings are presented
in table 4.8 below.
49
Table 4.10 Technology Correlation
Correlations
Use of
the
newest
technol
ogy in
the
product
ion
process
The
productio
n process
in the
company
is quite
effective
and
efficient
The
company
reviews
of its
processes
from time
to time
The
compan
y has a
robust
researc
h and
develop
ment
functio
n
The
company
has
robust
informati
on
communi
cation
technolo
gy (ICT)
tools and
systems
ICT
effecti
vely
suppor
ts the
compa
ny's
proces
ses
and
operat
ion
Prom
oting
R&D
and
ICT
R&D and
ICT have
decreased
the
company's
coordinati
on costs
and
enhanced
its
capacity to
conduct
R&D
Positive
relation
between
technolog
y and
competiti
veness of
the
company
Compet
itivenes
s
Competit
iveness
Pears
on
Corr
elati
on
.587** .591** .632** .424** .545** .535** .314** .336** .308** 1
Sig.
(2-
taile
d)
.000 .000 .000 .000 .000 .000 .001 .000 .001
N 118 118 118 118 118 118 118 118 118 118
**. Correlation is significant at the 0.01 level (2-tailed).
4.4.2 Regression Analysis of Technology and Competitiveness
To determine whether a linear relationship exists between technology and competiveness
exist the study conducted a regression analysis. Table 4.11, Table 4.12 and Table 4.13
present the findings from the study.
Table 4.11 Technology Model Summary
Model Summary
Model R R Square
Adjusted
R Square Std. Error of the Estimate
1 .677a 0.458 0.453 4.01910
a. Predictors: (Constant), Technology
50
The table 4.9 reveals that R squared is 0.458. Consequently, 45.8% of variation in
competiveness is explained by technology.
Table 4.12 Technology Anova
ANOVAa
Model
Sum of
Squares df
Mean
Square F Sig.
1 Regression 1581.239 1 1581.239 97.890 .000b
Residual 1873.769 116 16.153
Total 3455.008 117
a. Dependent Variable: Competitiveness
b. Predictors: (Constant), Technology
From the regression table above F=97.890 is greater than p value=0.000. This implies that
the technological factors significantly affect the competitiveness of Savannah product. The
significance was also confirmed by computing the coefficients as shown in Table 4.13.
Table 4.13 Coefficients of Technological Factors
Coefficientsa
Model
Unstandardized
Coefficients
Standardized
Coefficients
t Sig. B
Std.
Error Beta
1 (Constant) 2.682 0.432 6.207 0
Technology 0.476 0.048 0.677 9.894 0
a. Dependent Variable: Competitiveness
The coefficients table above determined that the simple linear regression model fit for the
data was:
Y=2.682 + 0.476X1+ε ;
51
Where Y=competitiveness, X1=Technology, ε=error term
4.5 Product Marketing and Competitiveness
The study also sought to establish how product marketing influence the competitiveness of
the company. To explore this relationship the study utilized the use of a five point Likert
scale where: 1-Strongly Disagree, 2-Disagree, 3- Neutral, 4-Agree, 5- Strongly Agree. The
results are tabulated in the table 4.15.
Table 4.14 Product Marketing and Competitiveness
Statement
Strongly
Disagree Disagree Neutral Agree
Strongly
Agree Total
The company engages in positive
marketing activities aimed at gaining
competitiveness 1.70% 16.90% 11.90% 49.20% 20.30% 100%
The company has employed effective
advertising activities compared to its
competitors 7.60% 28.80% 30.50% 22.90% 10.10% 100%
The company has changed its marketing
techniques in the past one year with the
intention of gaining competitiveness 5.10% 34.70% 33.90% 18.60% 7.60% 100%
The company has invested in market
research in order to understand
consumer needs and drive marketing
initiatives for effective competition 10.20% 25.40% 24.60% 30.50% 9.30% 100%
The company's products are better
positioned in the market compared to its
competitors 3.40% 8.50% 17.80% 43.20% 27.10% 100%
The company has put in place an
adequate advertising budget 5.10% 20.30% 47.50% 24.60% 2.50% 100%
There is a positive relation between
marketing activities and the
competitiveness of the company against
its rivals 2.50% 10.20% 28.80% 44.90% 12.50% 100%
52
More than 50% of the respondents agreed and strongly agreed that the company engages in
positive marketing activities aimed at gaining competitiveness, that the company's products
are better positioned in the market compared to its competitors, and that there is a positive
relation between marketing activities and the competitiveness of the company against its
rivals.
However, a majority of the respondents (more than 50%) were either neutral or
disagreed/strongly disagreed that the company has employed effective advertising activities
compared to its competitors, that the company has changed its marketing techniques in the
past one year with the intention of gaining competitiveness, that the company has invested in
market research in order to understand consumer needs and drive marketing initiatives for
effective competition, and that the company has put in place an adequate advertising budget.
In addition, the mean and standard deviation of the factors considered under technology were
computed. The results are presented in Table 4.16.
Table 4.15 Mean and Standard Deviation of Product Marketing and Competitiveness
Statement N Mean Std. Deviation
The company engages in positive marketing activities aimed at
gaining competitiveness 118 3.68 0.1031
The company has employed effective advertising activities
compared to its competitors 118 2.97 0.1102
The company has changed its marketing techniques in the past
one year with the intention of gaining competitiveness 118 2.87 0.1005
The company has invested in market research in order to
understand consumer needs and drive marketing initiatives for
effective competition
118 3 0.1142
The company's products are better positioned in the market
compared to its competitors 118 3.79 0.103
The company has put in place an adequate advertising budget 118 2.97 0.856
There is a positive relation between marketing activities and
the competitiveness of the company against its rivals 118 4.35 0.8911
The respondents agreed (3.68<mean<4.35) that the company engages in positive marketing
activities aimed at gaining competitiveness with a mean (3.68), the company's products are
better positioned in the market compared to its competitors with a mean of (3.79) and
positive relation between marketing activities and the competitiveness of the company
53
against its rivals with a mean of (4.35) were the major ways through which product
marketing influenced competitiveness.
The respondents also recorded a neutral stance (2.87<mean<3) on how; the company has
changed its marketing techniques in the past one year with the intention of gaining
competitiveness with a mean(2.87), the company has employed effective advertising
activities compared to its competitors with a mean (2.97), the company has put in place an
adequate advertising budget with a mean (2.97) and the company has invested in market
research in order to understand consumer needs and drive marketing initiatives for effective
competition with a mean of (3) as product marketing affecting competitiveness.
4.5.1 Correlation Analysis of Product Marketing and Competitiveness
Product marketing variables correlated against competitiveness revealed that all variables
were positively and significantly correlated with competitiveness. The results of the findings
are as shown in the table 4.17.
Table 4.16 Results of Correlation Analysis for Product Marketing and Competitiveness
Correlations
The
company
engages in
positive
marketing
activities
aimed at
gaining
competitive
ness
The
company
has
employe
d
effective
advertisi
ng
activities
compare
d to its
competit
ors
The
company
has changed
its
marketing
techniques
in the past
one year
with the
intention of
gaining
competitive
ness
The
company
has
invested
in
market
research
to
understa
nd
customer
needs
The
company
's
products
are
better
positione
d in the
market
compare
d to its
competit
ors
The
compan
y has
put in
place an
adequat
e
advertisi
ng
budget
There is a
positive
relation
between
marketing
activities
and the
competitive
ness of the
company
against its
rivals
Competitive
ness
Competitive
ness
Pearson
Correlat
ion
.291** .302** .306** .179 .165 .290** .515** 1
Sig. (2-
tailed)
.001 .001 .001 .053 .075 .001 .000
N 118 118 118 118 118 118 118 118
**. Correlation is significant at the 0.01 level (2-tailed).
54
4.5.2 Regression Analysis of Product Marketing and Competitiveness
To determine whether a linear relationship exist between product marketing and
competitiveness a regression model was fit to the data. Table 4.18, Table 4.19 and Table 4.20
present the findings from the study
Table 4.17 Product Marketing Model Summary
Model Summary
Model R R Square
Adjusted R
Square
Std. Error of
the Estimate
1 .403a 0.162 0.155 4.95586
a. Predictors: (Constant), Product Marketing
From the model summary above the study established the R square to be 0.162. This implied
that 16.2% of the total variation in could be explained by Product Marketing.
Table 4.18 Product Marketing Anova
ANOVAa
Model
Sum of
Squares df
Mean
Square F Sig.
1 Regression 599.807 1 599.807 22.429 .000b
Residual 2895.200 116 24.959
Total 3455.008 117
a. Dependent Variable: Competitiveness
b. Predictors: (Constant), Product Marketing
The P-value (0.000) show that product marketing significantly influences competitiveness of
the product.
55
Table 4.19 Product Marketing Coefficient
Coefficientsa
Model
Unstandardized
Coefficients
Standardized
Coefficients
t Sig. B Std. Error Beta
1 (Constant) 3.610 0.533 6.766 0
Product
Marketing 0.271 0.057 0.403 4.939 0
a. Dependent Variable: Competitiveness
From table 4.16 above the study established that the linear model fit in explaining the
relationship between product marketing and competitiveness was:
Y=3.610 (constant) +0.271X1+ε ;
Where Y=competitiveness, X1=Product Marketing, ε=error term.
From the model fit it can be explained that for every unit increase in Product Marketing,
competitiveness of the company goes up by 0.271 units.
4.6 Relationships between Leadership Factors, Technology, Product Marketing and
Competitiveness
This section examined the correlation of the independent variables against competitiveness as
well as the predictability of competitiveness based on the independent variables.
4.6.1 Correlation Analysis
Overall leadership factors, technology and Product Marketing correlated against
competitiveness revealed that; leadership factors (r=0.085,sig=0.358), Technology
(r=0.677,sig=0) and Product Marketing (r=0.403, sig=0) were positively correlated with
competitiveness. The summary of the findings is as shown in Table 4.22.
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Table 4.20 Competitiveness Factors Correlation
Correlations
Leadership
Factors Technology
Product
Marketing Competitiveness
Competitiveness Pearson
Correlation 0.085 .677** .403** 1
Sig. (2-
tailed) 0.358 0 0
N 118 118 118 118
** Correlation is significant at the
0.01 level (2-tailed).
4.6.2 Regression analysis
The study carried out a regression analysis to determine the predictability of competitiveness
based on leadership factors, technology and product marketing. The findings are as shown in
Table 4.23, Table 4.24 and Table 4.25.
Table 4.21 Competitiveness Factors Model Summary
Model Summary
Model R R Square
Adjusted R
Square
Std. Error of the
Estimate
1 .780a 0.609 0.599 3.44236
a. Predictors: (Constant),Technology, Product Marketing, Leadership factors
R square from the model summary above indicates that 60.9% of the model used to predict
the company competitiveness is explained by leadership factors, technology and product
marketing. The rest of the variation is explained by other factors other than the ones captured
in the study.
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Table 4.22 Competitiveness Factors Anova table
ANOVAa
Model
Sum of
Squares df
Mean
Square F Sig.
1 Regression 2104.129 3 701.376 59.189 .000b
Residual 1350.879 114 11.850
Total 3455.008 117
a. Dependent Variable: Competitiveness
b. Predictors: (Constant), Technology, Product Marketing, Leadership factors
From the Anova table above F value (59.189) at significance level (.000) implies that the
model is significantly fit to predict competitiveness based on leadership factors, technology
and Product Marketing.
Table 4.23 Competitiveness Factors Coefficients
Coefficientsa
Model
Unstandardized
Coefficients
Standardized
Coefficients
t Sig. B Std. Error Beta
1 (Constant) 1.548 0.459 3.371 0.001
Leadership factors -0.019 0.051 -0.022 -0.375 0.708
Technology 0.473 0.042 0.671 11.361 0
Product Marketing 0.262 0.039 0.390 6.643 0
a. Dependent Variable: Competitiveness
From the coefficients table the study found out that technology was the strongest predictor
for competitiveness (beta=0.473, sig=0.000). Product Marketing was also a positive predictor
for competitiveness (beta=0.262, sig=0.000). Leadership factors (beta=-0.019, sig=0.708)
negatively predicted competitiveness.
58
The model fit for predicting competitiveness was determined to be:
Y=1.548(constant)-0.019X1+0.473X2+0.262X3+ε ; where Y=Competitiveness,
X1=Leadership factors, X2=Technology, X3=Product Marketing, and ε=error term.
Thus for every unit increase in leadership factors competitiveness goes down by -0.019 units,
for every unit increase in technology competitiveness goes up by 0.473 units and for every
unit increase in Product Marketing competitiveness goes up by 0.262 units.
The study further determined that the multiple linear model fit is better in helping explain
competitiveness of Savannah Cement Company Limited than when each predictor is fit
alone.
4.7 Chapter Summary
The chapter provided an analysis and presentation of the findings of the study with the aim of
establishing a relationship between leadership factors, technology, and Product Marketing
and their influence on competitiveness. Variables data collected from the questionnaires was
largely categorized in general information, leadership factors, technology, Product Marketing
and competitiveness. The next chapter provides the summary, discussion, conclusion and
recommendation based on the study findings.
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CHAPTER FIVE
5.0 DISCUSSIONS, CONCLUSIONS AND RECOMMENDATIONS
5.1 Introduction
This chapter gives a summary, discussion of the results, conclusions, and recommendations
of the study. The summary provides a brief account of the purpose of study, specific
objectives, research methodology used and major findings from the study. The discussion
focuses on interpretation of the results while comparing it with major findings of other
research studies. The conclusion section sums up major findings from each objective of the
study while the recommendation offer suggestion for improvement as well as suggestions for
further studies.
5.2 Summary
The study sought to establish the factors affecting competitiveness of Savannah Cement
Limited in Kenya. To investigate into these factors the study accessed the specific objectives;
to examine establish how leadership factors affect competitiveness of Savannah Cement
Limited in Kenya; to establish the influence of technology on the competitiveness of
Savannah Cement Limited in Kenya; and to find out establish how product marketing
influence competitiveness of Savannah Cement Limited in Kenya
The study adopted a descriptive research design in which a sample of 118 employees of
Savanah Cement was selected using stratified random sampling. Descriptive statistics was
used to present figures about general information of the respondents. Inferential statistics in
the form of correlation and regression analysis was used to help establish a relationship
between the dependent variable competitiveness and independent variables; leadership
factors, technology and product marketing.
The first objective on how leadership factors affect competitiveness revealed that leadership
factors; leadership style, leadership encouragement to employees, leadership inspiration and
motivation to employees, leadership encouragement on innovation and creativity, positive
relation between innovation and competitiveness, leadership interest in nurturing employees,
60
leadership adaptation to new market realities, leadership success in strategic implementation
and positive relation between leadership and competitiveness had influence on
competitiveness. A majority of the respondents demonstrated an understanding of the factors
and how they affect competitiveness as shown by the different correlation values.
Leadership style (r=0.011, p=0.902), leadership adaptation to new realities (r=0.131, p
value=0.158), leadership success in strategic implementation success (r=0.131,p
value=0.157), positive relation between leadership and competitiveness(r=0.129,p
value=0.164) had a positive correlation with competitiveness. Leadership factors such as
leadership encouragement to employees ( r=-0.009,p value=0.926),leadership inspiration and
motivation to employees (r=-0.004,p value=0.964),positive relation between innovation and
competitiveness (r=-0.011,p value=0.908), leadership interest in nurturing employees (r=-
0.12,p value=0.894) and leadership encouragement on creativity and innovation (r= -0.31, p
value=0.741) was negatively correlated with competitiveness. A weak positive relation
between leadership factors and competitiveness was established at beta value=0.082.
The second objective on influence of technology on competitiveness revealed that all
technology areas tested had significant influence on competitiveness. Newest technology
(r=0.587), effective and efficient production process (r=0.632), reviews of company
processes (r=0.424), robust research and development function(r=0.545), robust ICT tools
(0.535), effective ICT support (r=0.314), promotion of R&D and ICT (r=0.308), reduction on
coordination cost(r=0.336) and positive relation between technology and competitiveness
(r=0.308) all had a positive correlation with competitiveness. As such a positive relationship
between technology and competitiveness was established at beta value =0.478.
The third objective on how product marketing influence competitiveness reveled that all
product marketing assessed by the study had an impact on competitiveness of the company to
some extent. Positive marketing activities (r=0.291), effective advertising activities
(r=0.302), change in marketing techniques (r=0.306), investment in market
research(r=0.179), better positioning of products (r=0.165), adequate budgeting techniques
funds (r=0.290) and positive relation between marketing activities and competitiveness
(r=0.515) all were positively correlated with competitiveness. Consequently, on overall the
61
study was able to establish a positive relationship between product marketing and
competitiveness at beta value = 0.279.
5.3 Discussion
5.3.1 Leadership Factors Effect on Competitiveness
The study found out that the company leadership style enabled it perform well in the market.
As such, the company leadership was conscious of its market and adapted well to the
changing market dynamics. Further, the study revealed that there was a positive relation
between leadership and competitiveness of the company. This was in agreement with earlier
findings where (Menguc et al., 2013) noted that effective leadership is critical for
competitiveness of a company.
The study revealed that there was a positive relation between innovation and competitiveness
of the company underscoring the importance of innovation for the company to remain
competitive in the cement industry. According to Lochomoruk (2014), in today’s turbulent
environment, creativity and innovation was fundamental to achieve organizational success.
She argued that it is the role of leaders to tap creativity in organizations by establishing
conducive environment for incubation and delivery of creativity and innovation. Such
innovation and creativity will enhance the firms’ competitiveness. This was in line with the
observations by Kaur (2012) that leaders are the promoters that establish and manage the
firms’ internal environment, culture and strategies that fuel sustained innovation, creativity
and organizational success.
The study further revealed that the company was not performing well in the area of employee
motivation and inspiration. The company leadership did not encourage the employees to
participate when it comes to decision making time and did not try to implement their ideas
and suggestions. Employees would naturally own the process when they feel their ideas and
suggestions are considered in decision making. In the same stance, the company leadership
did not inspire and motivate the employees to deliver world class results and did not
encourage innovation and creativity of its employees. The company should strive to improve
62
in this area in line with the findings of Katuse, Kiriri, & Kyalo (2016) who noted that
employee motivation increases employee performance. This was similarly noted by Kaur
(2012), who argued that a positive perception of employees towards leadership behaviour
puts in more effort in their duties when they get inspiration to shine their performance and
ensure both financial and non-financial rewards as required in return by their leaders. He
argued that leaders appraise, give feedback and coach their employees when productivity is
below expectation and reward them upon achievement of targets. According to him, there are
many mechanisms of motivating employees by their leaders which includes being a role
model, challenging them to take responsibility and ownership for their work and
understanding them.
The study further found out that the company leadership was not keen on nurturing and
developing the company employees. This hinges on employee training and skill
development. If well implemented, training and skill development of employees increases the
employee capacity and growth and the organization thus increasing competitiveness (Arthur,
Bennett, Edens, & Bell, 2003). Kaur (2012), observed that good leadership will identify and
nurture talent and will support their employees to learn and develop as individuals by
inspiring and encouraging them with a handy range of behavioral and decision-making skills.
The company leadership did not quickly adapt to change and new realities in the market. The
company leadership, however, seemed to have just succeeded in strategy implementation.
These findings were drawn from the positive correlation between leadership strategic
implementation and competitiveness. These findings agree with the findings of Rajasekar
(2014) who investigated factors affecting effective strategy implementation in a service
industry: a study of electricity distribution companies in the Sultanate of Oman. In his study
he argues that successful strategy implementation is a key for any organization’s survival. In
his findings he demonstrates that for an organization to sustain their competitive advantage in
any industry then the leadership of the organization should be able to influence the
organization competitive advantage.
63
5.3.2 Influence of Technology on Competitiveness
The study found out that the company used the newest technology in its production process
and had a robust information communication technology (ICT) tools and systems. In
addition, the company's ICT effectively supported the company's processes and operations.
This underscored the central role played by technology in enhancing the company’s
performance and thereby increasing its competitiveness. These findings were in agreement
with previous findings where technology was noted to be a key driver for a firm’s survival in
the market place (Vassakis, Voulgaris, Xekardakis, & Lemonakis, 2015).
From the analysis of this objective the study found a positive relationship between
technology and competitiveness. According to the study technology had the most positive
influence on competitiveness. Wambugu (2012) notes technology is a key factor that
influences competitiveness. She further mentions that technological change can create new
possibilities for the design of a product, the way of commercialization, produce it or deliver it
and the subsequent auxiliary provided services. Finally from the findings of her study she
concludes that technology as a factor influencing competitiveness it has at least more than
moderate influence.
The findings of this study also concur with the findings of Irungu (2017) who investigated
factors influencing competitiveness of small and medium enterprises (SMEs) in Nairobi
County, Kenya. In their study they found out that sustainable competitive advantage of any
firm stem out from effective use of technology.
The study further revealed that the company did not have a robust research and development
(R&D) function and was not keen on promoting R&D and ICT. This is a key area for
improvement if the company is keen on enhancing its competitiveness. The study noted that
the company still needed to improve on its production process in the company to make it
more effective and efficient. The company should review its processes from time to time to
enhance its competitiveness. As noted by Muthoni (2017), constant review of the company’s
processes will increase its efficiency and cut down on costs while improving the product
features. According to Mithas, Tafti, Bardhan, and Goh (2012), ICT had a positive impact on
64
a firms profitability through enabled revenue growth. They argued that with a firms
continuous investment in ICT the firm can maintain a more proactive digital posture and
benefits from the learning thus becoming better at managing ICT. Second, such continuous
investment and experience in ICT benefits the firm with respect to improving the firms
capacity to leverage from information and strengthen organizational capabilities such as
improved customer satisfaction and reduced marketing spend. Thirdly, technology
investments enhance revenue growth through new marketing and distribution channels, new
value propositions and better management of the customer life cycle.
The company’s survival is increasingly dependent on its use of technology in its operations.
A key area of focus is to continuously update its technology ahead of the ever changing
market and customer needs and leverage on this to remain competitive. Accordingly, the firm
should maintain a keen eye on the two key areas in technology namely knowledge creation
and access to information given the significant bearing they have on the firms’
competitiveness.
5.3.3 Product Marketing and Competitiveness
The study found out that the company engaged in positive marketing activities aimed at
gaining competitiveness and that its products were better positioned in the market compared
to its competitors. This was in agreement with Armstrong & Kotler (2015) who noted that a
firm can generate competitiveness by differentiating and positioning itself as providing
superior consumer value in the market place.
The study found out that product marketing based on positive marketing activities, effective
advertising activities, change in marketing techniques, investment in market research, better
positioning of products, adequate budgeting techniques and positive relation between
marketing activities had a positive relationship with competitiveness. These findings concur
with the findings of Mahmood (2010) who investigated on the impact of marketing on
creating a sustainable competitive advantage. The findings from their study concluded that
there exists a positive relationship between marketing and a firm’s creation of sustainable
competitive advantage.
65
The study further noted that the company had not employed effective advertising activities
compared to its competitors. Effective advertising activities are critical as noted by
Manickam (2014) that the role of advertising is expanded in today’s competitive business
world, as companies allocate enormous sums of money to build brands, identify, target,
reach, and influence consumers of their products or services. It creates awareness, provides
the required information to the target consumers and increase knowledge of the firms product
or service leading to purchase by the customer. Without effective advertising the consumers’
awareness and knowledge of the firms’ products is diminished adversely affecting its
competitiveness.
The study revealed that the company had not changed its marketing techniques in the past
one year with the intention of gaining competitiveness and that the company had not invested
in market research in order to understand consumer needs and drive marketing initiatives for
effective competition. The company should invest in market research and change its
marketing techniques in line with the consumer needs. As noted by Armstrong & Kotler
(2015), for a firm to cultivate profitable relationships with target consumers, a firm must
comprehend consumer needs and deliver more value than competition. Marketing research is
good tool for understanding consumer needs. They further observe that this would help the
company to implement tactical marketing tools combined into an integrated marketing
package that actually delivers the intended value to target consumers.
Finally the study found out that the company had not put in place an adequate advertising
budget. As Armstrong & Kotler (2015) further noted, an effective advertising program must
be supported by an adequate budget. The company should relook into its marketing budget
with a view to generating maximum return from advertising initiatives. Of course, the firm
should firm start by mapping out its marketing activities driven by consumer needs and then
allocate adequate budget to these activities.
66
5.4 Conclusion
5.4.1 Leadership Factors Effect on Competitiveness
Based on the analysis of this objective it can be concluded that leadership factors had a weak
positive influence on competitiveness of the company. Definite leadership factors variables
such as leadership adaptation to new realities and leadership success in strategic
implementation were positively correlated to competitiveness. Other leadership factors such
as leadership interest in nurturing employees, and leadership encouragement on creativity
and innovation were negatively correlated with competitiveness perhaps because they are
difficult to test.
5.4.2 Technology and Competitiveness
Based on the findings of the study it was concluded that technology; newest technology,
effective and efficient production process, reviews of company processes, robust research
and development function, robust ICT tools, effective ICT support, promotion of R&D and
ICT, reduction on coordination cost and positive relation between technology and
competitiveness all positively and at a p value 0.000 significantly influenced
competitiveness. This explained why technology was the strongest positive predictor of
competitiveness.
5.4.3 Product Marketing and Competitiveness
The study concluded that the product marketing; positive marketing activities, effective
advertising activities, change in marketing techniques, investment in market research, better
positioning of products, adequate budgeting techniques funds and positive relation between
marketing activities and competitiveness all were positively correlated with competitiveness
at different p values. Product marketing also had a positive influence on competitiveness.
67
5.5 Recommendations
5.5.1 Recommendations for Improvement
5.5.1.1 Leadership Factors Effect on Competitiveness
Leadership as a role is dynamic in nature. It is therefore paramount for the company
leadership to understand it’s role in not only influencing tangible factors such as success in
strategic implementation but as also other factors which are difficult to assess yet crucial to
the organization competitiveness such as nurturing and motivating employees and adapting
to change and new realities in the market place.
5.5.1.2 Technology and Competitiveness
Technology runs the world today. Through the various technology assessed it was
established that indeed these were the strongest positive predictors of the company
competitiveness. The study therefore recommends that the company continues to embrace
technology that is beneficial to its competitiveness.
5.5.1.3 Product Marketing and Competitiveness
Marketing as a factor is crucial in influencing competitiveness of a product in any market.
Despite the fact that the product marketing adopted by Savannah Cement Limited seem to be
having a positive influence on competitiveness, changing its marketing techniques based on
market research and allocating an adequate marketing budget could yield a better results.
5.5.2 Recommendations for Further Studies
Through the study it was determined that leadership factors, technology and product
marketing together only account for 60.9% of total variation in competitiveness. It would be
valuable to explore what other factors help explain competitiveness of company. As such a
pool of knowledge would conclusively map out the factors that play a role in explaining the
competitiveness of the company.
68
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APPENDICES
APPENDIX I: INTRODUCTORY LETTER
Anton Mang’ea David
P.O. Box 27910 – 00100
NAIROBI
Respondent
Savannah Cement Limited
P.O. Box 27910 – 00100
NAIROBI
Dear Respondent,
My name is Anton Mang’ea David an MBA student at USIU-A, Nairobi, Kenya. I am
conducting a study on the factors affecting competitiveness of Savannah Cement Limited in
Kenya, which is a requirement for the award of the degree of Masters of Business
Administration.
I am kindly requesting for your help in filling this questionnaire by marking [√] and writing
appropriate answers. This survey is anonymous and the data and information provided will
be handled with utmost confidentiality.
Your support is much appreciated.
Anton Mang’ea
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APPENDIX II: RESEARCH QUESTIONNAIRE
PART A: GENERAL INFORMATION
Complete this section of the questionnaire by filling in the relevant detail or by ticking (√ or
×) appropriately
1. What is your age:
Below 25 [ ] 26-35 [ ] 36-45 [ ] 46-55 [ ] Above 55 [ ]
2. What is your gender? Male [ ] Female [ ]
3. What is your highest level of education?
Diploma [ ] Graduate [ ] Post Graduate [ ] Other [ ]
4. How long have you been working in the company (in years)?
Less than 1 [ ] 1-2 [ ] Above 2-3 [ ] Above 3-4 [ ] 5 and above [ ]
5. Which department of the company do you work?
Finance [ ]
Procurement [ ]
Internal Audit [ ]
Security [ ]
Human Resource and Administration [ ]
Executive Office [ ]
Safety, Health and Environment [ ]
Manufacturing [ ]
Sales and Marketing [ ]
Other [Specify…………………………………………………………..] [ ]
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6. What is your position in the department?
Top Management
[ ] [ ]
Middle
Management [ ] [ ]
Lower Management
[ ] ]
Non managerial position
[ ]
PART B: LEADERSHIP FACTORS
7. Please respond to the following statements by circling a number between 1 and 5 on the
scale that best represents your organization.
[1] Strongly Disagree, [2] Disagree, [3] Neutral, [4] Agree, [5] Strongly Agree
QUESTIONS 1 2 3 4 5
a. The company leadership style has enabled it perform well
in the market.
b. The company leadership encourages the employees to
participate when it comes to decision-making time and
tries to implement their ideas and suggestions.
c. The company leadership inspires and motivates the
employees to deliver world-class results.
d. The company leadership encourages innovation and
creativity of its employees
e. Because of the innovation activities in the company it is
able to compete favorably with competitors
f. There is a positive relation between innovation and
competitiveness of the company.
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PART C: TECHNOLOGY
8. Please respond to the following statements by circling a number between 1 and 5 on the
scale that best represents your organization.
[1] Strongly Disagree, [2] Disagree, [3] Neutral, [4] Agree, [5] Strongly Agree
g. The company leadership is keen on nurturing and
developing the company employees.
h. The company leadership quickly adapt to change and new
realities in the market.
i. The company leadership has been successful in Savannah
Cement Ltd strategy implementation.
j. There is a positive relation between leadership and
competitiveness of the company.
QUESTIONS 1 2 3 4 5
a. The company uses the newest technology in the
production process to remain competitive.
b. The production process in the company is quite effective
and efficient and helps the company remain competitive.
c. The company is innovative with respect to its processes.
d. Attaining competitive advantage through process
innovation is one of the main objectives of the company.
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PART D: PRODUCT MARKETING
9. Please respond to the following statements by circling a number between 1 and 5 on the
scale that best represents your organization.
[1] Strongly Disagree, [2] Disagree, [3] Neutral, [4] Agree, [5] Strongly Agree
e. The company reviews its processes from time to time to
enhance its competitiveness.
f. The company has a robust Research & Development
(R&D) function.
g. The company has robust Information Communication
Technology (ICT) tools and systems.
h. The company’s ICT effectively supports the company’s
processes and operations.
i. The company is keen on promoting R&D and ICT.
j. The company’s R&D and ICT have decreased the
company’s coordination costs and enhanced its capacity
to conduct R&D.
k. There is a positive relation between technology and
competitiveness of the company.
QUESTIONS 1 2 3 4 5
a. The company engages in positive marketing activities
aimed at gaining competitiveness.
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b. The company has employed effective advertising
activities compared to its competitors.
c. The company has changed its marketing techniques in the
past one year with the intention of gaining
competitiveness.
d. The company has invested in market research in order to
understand consumer needs and drive marketing
initiatives for effective competition.
e. The company’s products are better positioned in the
market compared to its competitors.
f. The company has created a compelling and differentiated
brand positioning compared to its competitors
g. The company has put in place an adequate advertising
budget.
h. The company offers differentiated products to the market
which has enhanced its competitiveness.
i. There is a positive relation between marketing activities
and the competitiveness of the company against its rivals.
