An Analysis of the Competitive Strategies Adopted by Local Companies in the Oil and Gas Industry

Abstract

Most petroleum and gas tenders are still given to foreign companies, despite the mandate of the local content legislation. Ugandan businesses often find that their business strategies have had to deal primarily with major foreign conglomerates. This research therefore served to determine the competitive strategies used by the local oil companies to create competitive advantage in the Petroleum industry. To achieve this, various competitive advantage factors are examined and tested with regards to local oil and gas companies. This was done by employing a quantitative-cross sectional research design thereby designing a questionnaire that investigated the competitive advantage strategies used. Out of the 130 questionnaires administered, 96 were returned, of which only 80 were valid. The findings were presented through percentages, means, standard deviations and frequencies. The information was also represented by use of table, charts and in prose-form. This was done by tallying up responses, computing percentages of variations in response as well as describing and interpreting the data in line with the study objectives. Based on the research findings and answers to research questions, the researcher made the conclusion that quality service offered, distribution channels, reputation factors, technology, human resource management and innovation were used by many local oil and gas companies to advance competitiveness. The least factor that influenced competitive advantages of firms in the local oil and gas industry at little extent were having a well planned and executed strategy that is sustainable. The results of the study reveal that most local oil companies profile their customers and tailor their products to meet their specific needs. Also, the study found out that most local oil companies have divisions within the firm that are designed to cater for the specific client segments. The local oil companies operate at low costs and they boost their reputation towards the third party by maintaining high quality products. From the research findings it can be concluded that the competitiveness of any local oil companies is determined by how well the companies can satisfy its clients’ needs by analyzing their need and surpassing their expectations. This can also be enhanced by the local oil companies meeting these needs at lowest cost possible and not compromising on the quality of the product.