CORPORATE LEVEL STRATEGIES AND PERFORMANCE OF COFFEE SECTOR IN NAIROBI METROPOLITAN, KENYA

Marlin Vuguza Chang’alwa, Dr. Patrick Kimaku

Abstract


The general objective of this project was to evaluate effects of corporate level strategies on performance of coffee sector in Nairobi Metropolitan Area, Kenya. The Nairobi Metropolitan Area consists of Nairobi county, Kiambu county, Murang’a County and Kajiado county. The specific objectives were to; examine the effects of product development, strategic partnerships, divestment and market development on performance of coffee sector in Nairobi Metropolitan region. The research was guided by Product Life Cycle Theory, The Real Options Theory, Resource Dependence Theory and New Trade Theory. The research adopted descriptive research design. Stratified random sampling method was applied to select samples from coffee stakeholders. The target organizational population consisted of 157 licensed coffee members drawn from 15 coffee millers, 84 coffee dealers, 11 commercial marketing agents, 14 private warehousemen, 4 management agents, 22 grower marketers and 7 commercial warehousemen. Respondent target population comprised of 2 top most managers which will translated to 314. The number of elements in each stratum was obtained by proportional allocation. Two top most manager from each institution was selected hence the total sample size was 122. Questionnaires were used for data collection. Pilot study will be conducted to identify potential deficiencies and problematic areas in research instruments before implementing the real study. Reliability analysis was conducted for all variables in the study by Cronbach’s Alpha (α) value. Multiple regression model was used to test significance of effects of the independent variable on dependent variable. Data analysis was done using Statistical Package for Social Sciences (SPSS) version 23. Findings established that product development contributes to a strong significant effect on performance in the coffee sector (β=.463, p=005),strategic partnership strongly and significantly affect performance of the coffee sector (β=.665, p=002),  there is a moderate insignificant effect of divestment on performance in the coffee sector (β=.360, p=165), and a  weak insignificant effect of market development of performance in the coffee sector (β=.097, p=567). The recommendations are that; the companies should allocate more resources for innovation, research and development, the companies should continuously partner with other players in the sector to ensure that they  expand  to every region of target market , the company’s management should ensure that all non-performing assets  are disposed of and should implement the best market penetration strategies and take initiative in regard having competition from the rivals.

Key Words: corporate level strategies, product development, strategic partnerships, divestment and market development


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