An investigation of strategies for competitive advantage and their effect on performance of tea processing companies in Kenya

Abstract

Organizations are dependent on the environment for inputs. and also for outputs. The environment provides them with opportunities as well as threats and the organization has to constantly align itself to forces in the environment and maintain a fit between itself and environment. Strategic management enables firms to position themselves in the commercial arena while taking advantage of its resources and capabilities to take advantage of opportunities in the environment and minimizing the environmental threats and thereby ensuring its survival. Thus firms have to embrace competitive . strategy which aims at establishing a profitable and sustainable position against forces that determine industry competition. Therefore various firms in a similar industry for instance the tea industry need to come up with competitive strategies to ensure a secured position in the market. The objective of the study was to establish the strategies for competitive advantage used by tea processing companies in Kenya and their effect on performance of these firms. The specific objectives of the research study was to find out, the number of firms that have formulated and selected a strategy to com pete, the result of the strategy on the performance of the firm and the generic strategy that yields superior performance for firms in the Kenyan tea industry. The population of the study was all green tea processing companies in Kenya that manufacture black Cut, Tear and Curl (CTq teas. Primary data was collected through a self administered questionnaire. Secondary data was collected from published sources. Content analysis was used for qualitative data obtained from open-ended questions. Descriptive statistics was used to present data. These included percentages, frequency distribution, means, mode and standard deviation. From the findings, tea processing firms have embraced strategies that are geared towards achieving either cost leadership, differentiation or focus for which each has achieved different levels of success on their application. Only a few firms have succeeded in their application of strategy and the rest have encountered challenges in pursuing the strategy. The performance of firms in the sector has not been excellent which can be attributed to their failure to attain either of the generic strategy options. Firms will need to address the drawbacks that have come in between their pursuit of the strategy and their success application of the strategy for their performance to remain above average in the long term.