Competitive strategies employed by the sugar manufacturing firms in Kenya

Abstract

The major objectives of this study were to determine the competitive strategies employed by the sugar manufacturing firms in Kenya and to determine the challenges facing the attainment of these strategies. The turbulent environment in which businesses operate demand that the firms craft competitive strategies that are sustainable and assures them of their market position. Sugar manufacturing firms are faced with many challenges that must be urgently addressed. These challenges include low production capacities, poor technology, poor infrastructure, inadequate research, high input costs, indebtedness, lack of funding, and reliance on a single product. Currently there are six (6) white Sugar-manufacturing firms in operation. These firms are Muhoroni Sugar Co. Ltd (in receivership), Chemelil Sugar Co. Ltd, Mumias Sugar Co. Ltd, Nzoia Sugar Co. Ltd, South Nyanza (SONY) Sugar Co. Ltd and west Kenya Sugar Co. Ltd. All these six firms formed the population of the study. Data for this study was obtained through personal interviews with the chief executive officers using a questionnaire comprising both open -ended and closed questions. The findings of this study show that the sugar manufacturing firms have formalized vision and mission statements. They employ competitive strategies of cost leadership, differentiation and focus to different degre~s. Cost leadership strategy is the most widely practiced amongst the firms. Differentiation strategy -m.ainly revolve around customers service, distribution networks, and branding. Focus strategy is also in use, though quantities sold to target customers are relatively low. The study was limited only to the white sugar manufacturing firms currently in operation. Other institutions which have profound influence and effects such on the sugar industry like KESREF, KSB, MoA, MoF, MT&I, KESMA and KESGA were not given the attention they deserve. The study focused on the competitive strategies only while firms can also use other strategies such as cooperative strategies to improve their economic performance. The study concludes that the sugar industry in Kenya needs serious and urgent reforms to address the highlighted challenges so as to favourably compete both regionally and globally and that further studies should not be limited to the Kenya sugar firms only but should cover other Sugar manufacturing firms in the COMESA region.