Strategic Thinking and Competitive Advantage: Evidence from the Nigerian Pharmaceutical Industry

Abstract:

The focus of this study is on strategic thinking and competitive advantage in the Nigerian pharmaceutical industry. Competition is now based on knowledge, technology and the ability to serve customers fast and repeatedly. These are functions of strategic thinking in an organisation. We disaggregated strategic thinking into systems thinking, reflective thinking and creative thinking to ascertain their level of impact on the competitive advantage of firms in the pharmaceutical industry. Using data obtained from 91 employees drawn from three pharmaceutical companies in Nigeria, we adopted the Principal Component Analysis (PCA) technique in analysing the data. The analysis found significant effects of systems and creative thinking on the competitive advantage of pharmaceutical firms in Nigeria. In contrast, reflective thinking was not a significant component of the firm’s competitive advantage. The extraction effects of the components revealed that encouragement of individual employees through seeking their ideas on key decisions, leaders being part of the feedback process in the organisation, participative discussions and enhancement of practical skills of employees accounted for high variance in the firm’s strategic thinking and competitive advantage. The study concluded that companies in the Nigerian pharmaceutical industry have more attachment to systems thinking and creative thinking than reflective thinking. Part of the recommendations was adopting the strategic thinking process of plan, act, observe, reflect and plan again to enhance their competitive advantage in the pharmaceutical industry.