GROWTH STRATEGIES AND PERFORMANCE OF MILK PROCESSING FIRMS IN KENYA
Abstract
The study’s general objective was to investigate the growth strategies and performance of Kenyan milk processing companies. The study adopted a descriptive survey research design. It collected data using structured questionnaires from respondents. A census study targeting managers of all the 35 milk processing firms that were operational between February 2019 and February 2021 and registered with Kenya Dairy Board, was conducted. The data acquired was analysed utilizing descriptive and inferential statistics with the help of IBM SPSS Statistics for Windows, Version 25. Frequencies, percentages, means, standard deviations and cross-tabulations were computed to summarise the data. To test the predictive nature of the independent variables, the study used a regression analysis model. Several diagnostic tests including Shapiro Wilk test, Glesjer Test, Pearson correlation test, Durbin Watson test, and Variance Inflation Factor (VIF) were performed to check for normality, homoscedasticity, linearity, autocorrelation, and multicollinearity respectively, in the regression model, and therefore its reliability in prediction. The Shapiro Wilk normality test revealed that the data did not have a normal distribution, so the dependent variable data was log transformed with a base of 10. The regression results indicated that cost leadership strategy (β = 0.008, p > .05), and product diversification strategy (β = -0.002, p > .05) had no significant influence on the performance of Kenyan milk processing companies. The results also showed that differentiation strategy (β = 0.060, p < .05) and focus strategy (β = 0.042, p > .05) had a significant positive partial influence on the performance of Kenyan milk processing companies. The study concludes that differentiation and focus strategies are significant predictors of Kenyan milk processing companies’ performance. Based on the research findings, the researcher recommended that the management of Kenyan milk processing companies should develop and invest in sound strategies to drive the growth of milk processors from a local scope to national and eventually global. The study also recommended that the boards of the individual milk processing companies should spend a lot of money on managers' and employees' knowledge acquisition about how to successfully adopt and implement various growth strategies in order to create competitive advantage in the sector. The researcher also recommended that the Kenya Dairy Board should have adequate engagements with the respective firms in designing suitable policies and strategies to sustain the milk processing industry’s expansionary programs.
Key Words: Cost Leadership, Differentiation, Focus, Products Diversification
CITATION: Njogu , J. K., & Murigi, E. M. (2023). Growth strategies and performance of milk processing firms in Kenya. The Strategic Journal of Business & Change Management, 10 (2), 815–838.
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DOI: http://dx.doi.org/10.61426/sjbcm.v10i2.2637
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