Sustainable competitive advantage in the insurance industry in Kenya

With the accelerating pace of competition and innovation, cutting-edge companies are
defined by innovative strategies. Industry leaders create a competitive advantage that
enables them to drive superior financial performance through boom and bust cycles. They
focus on building long-term strategic advantages rather than investing aggressively when
the market is strong and summarily cutting programs when the economy and pricing
environments weaken. The study was based on the insurance industry and was to provide
an understanding of the nature of sustainable competitive advantage adopted by insurance
firms in Kenya. The objectives were to establish how insurance companies are creating
sustainable competitive advantage and the challenges faced in creating the sustainable
competitive advantages. The study adopted a survey design with the population being
randomly sampled. Data was collected through questionnaires and analyzed. The results
indicated that majority of the firms used cost leadership strategy to create sustainable
competitive advantage. They also indicated that all players irrespective of the competitive
strategy adopted experienced strategy implementation challenges. The study had some
limitations which included the categorization of the firms based on the different services
offered as a whole as opposed to their individual categories. Other limitations were not
considering process of strategy implementation as a whole and not considering the role of
regulation and policy framework in the industry. Based on the study, it is recommended
that players in the industry constantly evaluate their strategies with an aim of staying
ahead of the competition. This can be done through adopting cost reduction strategies,
focus strategy and investing in resources. Further studies can be carried on to determine
the strategic responses other firms adopt to different competitive strategies and factors
considered when doing so. The study can also be extended to other industries to see if the
same strategies are used across industries.