A Survey of Competitiveness in the Passenger Road Transport Sector in Nairobi-Kenya
Posted: 14 Aug 2012
Date Written: August 14, 2012
The purpose of the study was to identify the key competitive dimensions employed by players in the low cost, mass market commuter road transport sector in Nairobi, Kenya. The theoretical framework for this study was Michael Porter’s Industry Analysis model. This model assumes five competitive forces, which determine the attractiveness of a given industry. These forces are: the barriers of entry into the industry, threat of substitute products, bargaining power of buyers, bargaining power of suppliers and industry rivalry. The Porter’s Five Forces Industry Analysis model is a strategy tool that is used to make an analysis of the attractiveness (value) of an industry structure.
The study used a survey design. The population of the study consisted of all public service vehicle owners operating in Nairobi and registered under the Public Service Vehicle Owners Welfare Association of Kenya; the City buses namely, Citi Hoppa, Express Connections, KBS, and other formal and informal public commuter transport providers. The sample of the study was restricted only to the motorized providers of low unit cost mass-market public passenger road transportation. These include public service vehicle owners registered under the Public Service Vehicle Owners Welfare Association of Kenya and city buses. Data was collected by means of a questionnaire. Data analysis was conducted using descriptive statistics.
The key finding of the study was that there was a lot of activity in the PSV sector that has influenced the industry’s competitiveness. The threat from other competing means of transportation had the lowest levels of activity and it was determined from the low mean values on all the parameters used as proxies to the threat. The sector was also seen to be very active in employing marketing strategies to enhance competitiveness. The study recommended that the passenger transport sector increase innovative use of alternative means of transport.
Keywords: Matatu, mang’otore Matatu, 'thirty cents’, illegal groups
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