INVESTIGATION OF THE RELATIONSHIP BETWEEN MONOPOLY STRATEGIES AND VALUE PROPOSITION ENVIRONMENT ON ELECTRICITY UTILITY IN KENYA

Abstract

Studies have shown that lack of competition allows companies to artificially inflate prices, impacting consumers' quality of life and deterring investment in the economy. The research gap addressed by the study was the monopoly that has stifled innovation and led to inefficiencies in the electricity supply chain. The general objective of the study was to investigate the relationship between monopoly strategies and value proposition environment on electricity utility in Kenya. The research was guided by the following specific objectives, to determine the relationship between pricing strategies and value proposition environment on electricity utility in Kenya, to explore the relationship between political/corporate political strategies and value proposition environment on electricity utility in Kenya, to establish the relationship between technological strategies and value proposition environment on electricity utility in Kenya, to investigate the moderating role of Michael Porter Five Forces between monopoly strategies and value proposition environment on electricity utility in Kenya. The study findings are of great importance, as it would have significance on the customers, government, the SDGs, Agenda Africa 2063, Kenya Vision 2030, and the Kenya Energy Transmission Companies. The study was guided by four theories: Porter’s Generic Competitive Theory, The theory of value,the Delta Theory and Chamberlain’s Theory of Monopolistic Competition. The research philosophy used was pragmatism as it is involved with the quantitative research design. The target population consisted of households and Small Medium Enterprises (SMEs) in Murang’a, Embu, and Nairobi Counties, which collectively represent a significant portion of electricity consumers in Kenya. The study employed a disproportionate sampling method, with percentages for various industries randomly chosen after careful consideration, with a sample size of 384 respondents. The Krejcie & Morgan table was utilized to ensure representative sampling. Structured questionnaires were distributed concurrently across the three counties to ensure data collection consistency. A pilot study was done to test the reliability and validity of the questionnaire. Despite logistical challenges, 259 questionnaires were collected out of the total 384 distributed. Analysis revealed strong positive correlations between political/corporate political strategies, legal strategies, technological strategies, and Michael Porter's Five Forces with the value proposition environment. However, pricing strategies exhibited a weaker positive correlation. Regression analyses further supported the significance of these relationships. The study underscores the critical role of strategic decision-making in shaping the value proposition environment on electricity utility in Kenya. It highlights the need for comprehensive strategies that consider pricing, political/corporate political, legal and technological aspects to enhance consumer value and promote sustainable growth in the electricity sector. The study recommends diversifying pricing strategies, strengthening political engagement for supportive policies, investing in robust legal strategies for compliance, embracing technological innovation for competitiveness, leveraging Porter's Five Forces framework for strategic insights. The researcher suggests that there is need to review the extent of political factors surrounding the proliferation of organizations existing as monopolies in Kenya, including the implication of the political factor in the monopolization of these organizations.