Influence of Growth Strategies on the Performance of Large Food and Beverage Companies in Kenya

Abstract

There has been a growing interest among food and beverage companies globally in embracing growth strategies to enhance their competitive advantage in the face of heightened competition. This study aimed to examine the impact of growth strategies on the performance of the major players in the food and beverage industry in Kenya. The research was based on Ansoff's Market Growth Theory and Institutional theory. Employing a cross sectional descriptive research design, the study focused on the entire population of 65 large food and beverage companies as per Kenya Association of Manufacturers in Kenya. Target respondents were Chief Executive Officers (CEOs) within each large food and beverage company and in their absence the questionnaire was administered to their assistant. This research used primary and secondary sources of data. Primary data was gathered using a structured questionnaire, while secondary data was obtained by accessing published journals from the organization, utilizing library resources, and reviewing studies conducted by other researchers. Data analysis involved descriptive and inferential statistics, with a focus on a correlation analysis using a multiple linear regression model to illustrate the interactions between independent and dependent variables. The study revealed positive correlations between market penetration and performance, market development and performance, product development strategy and performance, and diversification strategy and performance. The regression results further supported these positive relationships, indicating statistical significance for each strategy. The findings thus indicate that all growth strategies examined—market penetration, market development, product development, and diversification—are positively related to organizational performance. These results hold significant implications for theory, policy formulation, and industry practices within Kenya's food and beverage sector. The study recommends the implementation of growth strategies as they have been shown to influence organizational performance positively. The study was limited to use of cross sectional research design whose nature limits the ability to find out causality between growth strategies and performance and the scope of the research focused solely on the large food and beverage sector in Kenyan context. Therefore, the study recommends that future research can employ longitudinal studies to better capture causal relationships over time focusing on other manufacturing sectors.