Strategic capability and sustainable competitive advantage in large pharmaceutical firms: The moderating role of market entry mode

Abstract

The study sought to establish the nexus between strategic capability and long-term competitive advantage and how market entry moderates the linkage. Anchored on resource-based view, porter's generic strategies and internationalization theory, the study utilized cross-sectional research survey design. The study undertook a census approach targeting all seventy-three large pharmaceutical firms in Kenya. Data was collected using structured questionnaire. Result confirmed that market entry mode has statistically significant positive impact on the nexus between strategic capability and persistent competitive advantage. In particular, the study discovered that non-equity mode characterized as low control, less investment commitment and marginally reduced risk is preferred which conforms with the reality of developing country context such as Kenya. The result further revealed that firms sustained competitive advantage is supported by the alignment of internal strategic capabilities and appropriate foreign market entry modes. These results present managerial and policy implications in pharmaceutical companies: the companies need to invest in developing core strategic capabilities (innovation, marketing, technological, management) and choose entry modes complementing these capabilities carefully in a bid to attain competitive sustainability.