Effect Of Competitive Strategies On Organizational Performance In The Sugar Industry In Kenya

Abstract

Organizational performance in the sugar industry has become a major focus of managers due to the stiff competition witnessed in the industry. With this in mind, the issue of competitive strategies of the sugar industry has become paramount and all the sugar factories are preparing for stiff competition from new entrants. To achieve this objective, the sugar factories need a strategy that is competitive, sound and outstanding. The purpose of this research study was to establish the influence of competitive strategies on the organization performance, focusing on Sugar companies in Kenya. The conceptual framework had the three competitive strategies; cost leadership, differentiation and focus as independent variables and organization performance as the dependent variable. The model chosen for the study was Porter’s generic model. Porter's generic strategies describe how a company pursues competitive advantage across its chosen market scope. There are three generic strategies, either lower cost, differentiated, or focus. The study adopted a descriptive survey research design. The target population for the study comprised of 108 respondents drawn from 9 sugar companies operating in Kenya. The study used census sampling to select its respondents from the target therefore it had a sample population of 108 respondents. Questionnaires were used as the main data collection tool. Data collected was classified into categories for ease of statistical analysis .The coded data was analyzed using descriptive statistics and regression analysis that accepted or rejected null hypotheses. This was done with the aid of statistical package for social scientist (SPSS) version 16.0. These findings therefore indicated that the major way that the organization uses cost leadership is by pricing its products lower than those of their rivals in the market. The findings also indicated that the organization uses company branding as the major way of differentiating the organization and the product from their competitors for the sake of improving firm’s performance. The study concluded that organizations should closely monitor cost leadership as a tool and apply it to the advantage of their organization. It also concluded that organizations that apply differentiation strategy are able to create a niche for themselves in the market and even create customer loyalty. The organizations under study seem to have applied focus strategy on minimal basis and therefore the study recommended that organization should look into how they can apply focus strategy in order to spur the growth of the organization.