A SUPPLY CHAIN PERFORMANCE FRAMEWORK FOR SUGAR MANUFACTURING FIRMS IN KENYA: A FOCUS ON PRODUCT DIVERSIFICATION STRATEGY
Abstract
Globally, business diversification is increasingly being practiced by firms in a bid to increase their returns on investment and spread the firm’s risks. Sugar industry worldwide has started entering into new lines of business as a way of reducing costs and building synergies aimed at improving long-term sustainability. Despite this, majority of sugar industries in Kenya are struggling to make profits and meet the expectations of the shareholders. The Common Market for Eastern and Central Africa safeguard measures that would come to an end on February 2021 poses potential threat to the existence of sugar manufacturing firms in Kenya. The central theme of this study was to establish the effect of product diversification strategy on supply chain performance of sugar manufacturing firms in Kenya. The study was guided by the resource based view theory. Research design used was descriptive survey. Stratified proportionate sampling was used to select 396 respondents from a total of 1518 top-level managers, section heads and supervisors of sugar manufacturing firms in Kenya. This study inclined more to the positivistic philosophy. The respondents comprised of top-level managers, line managers and supervisors. Structured questionnaires were used as data collection instruments. Findings were; that while product diversification was associated with supply chain performance, it was a relative significant predictor of the supply chain performance (r=0.483). Recommendation, outsourcing activities should also be considered necessary, especially to manage non-core functions of sugar manufacturing firms. In conclusion sugar manufacturing firms in Kenya can promote performance by adopting newer varieties of cane that are short maturing.
Key Words: Product Diversification, Supply Chain Performance
CITATION: Kiongera, F. N., Ngacho, C., & Otuya, W. (2020). A supply chain performance framework for sugar manufacturing firms in Kenya: A focus on product diversification strategy. The Strategic Journal of Business & Change Management, 8 (1), 68 – 80.
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DOI: http://dx.doi.org/10.61426/sjbcm.v8i1.1894
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