An Assessment of Corporate Diversification Strategies and Their Role in Building Market Dominance: A Case of General Electric, Nairobi, Kenya

Abstract

Multinational Corporations are steadily growing their business in the developing countries through corporate diversification. The reason for entry of MNC’s into new markets with new products will be discussed in this paper with the assumption that corporate diversification strategies build market dominance. The study was guided by three objectives; to identify how General Electric had undertaken corporate diversification strategies in Kenya, to evaluate GE’s market dominance in Kenya in relation to corporate diversification strategies, and to determine the key market dominance drivers of corporate diversification strategies. The target population comprised 136 employees of General Electric in Nairobi office. Questionnaires were used as the main data collection instrument. A pre-test was carried out to establish validity and reliability. The researcher adopted a descriptive case design. Out of 136 questionnaires administered, a total of 82 filled questionnaires were returned. The study found out that GE had employed corporate diversification strategies through employing its resources, capabilities and competencies and that GE Kenya had undertaken product-market diversification. The study also found a positive relationship between corporate diversification and market dominance, with corporate diversification building market dominance for GE Kenya. The study also brings out the market dominance drivers with the case of GE, some of which were, risk management, bargaining power and reduced business seasonality. The study recommended that GE needs to provide a clear cut identification of activities related strategies to dominate the Kenyan market both at the institution’s level and also at the level of regulators.