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This study was anchored on the proposition that proper utilization of competencies creates proficiencies that build a niche for the firm. The study sought to make a contribution by focusing on how competencies can be crafted by it to knowledge management in an integrated structure to improve performance of multinational firms. The broad objective of the study was to determine the how firm competencies and knowledge management integrated to enhance competitive advantage of MNC’s in Kenya. This study was anchored on the resource based view theory and knowledge based view theory. The study adopted positivism orientation and a descriptive cross sectional survey was used to find out whether there was a significant association among study variables at a specific point in time. The study population was 104 multinational corporations operating in Kenya. Primary data was collected on a semi- structured questionnaire comprising a five point likert-type scale. Data was analyzed using infernal statistics. Correlation and multiple regression evaluated the relationship between the variables. Regression analysis was used to predict the unknown value of variables from two or more variables. The study established a significant relationship between firm competencies and knowledge management of MNCs. A significant relationship between knowledge management and firm competencies was established. The study has made a unique theoretical contribution by linking the theoretical views into an integrated framework. The findings of this study were consistent with past studies and supported theoretical assertions that sustained competitive advantage cannot be explained by isolated factors. The study concluded that for multinational corporations to enhance their performance they must utilize the competencies that they have, make use of the knowledge they possess and create synchrony between the variables. The current study extends knowledge frontiers in international business arena to cover competencies as a mature discipline that affects multinationals performance. Theoretically, the study increases knowledge in relation to the firm competencies- performance relationship. Policy makers will utilize the study findings to facilitate multinational corporations align to policies that will lead to economic prosperity. The study has a major implication on managerial practice in that managers can realize their organizations full potential by crafting competencies and embracing knowledge management to upsurge improved performance. Firms can also be encouraged to develop strategies consistent with superior performance. The study also discussed concepts in a bid to explore policies that can strengthen linkages between international business research and national objectives. Future studies need to emphasize on other variables that may affect the performance of multinationals either directly or as moderating variables.