Strategic Responses Of New Kenya Co-operative Creameries Limited To The Changing Environmental Conditions

Abstract

Pearce and Robinson (1997) defined strategic responses as the set of decisions and actions that result in the formulation and implementation of plans designed to achieve a firm’s objectives. It is therefore a reaction to what is happening in the economic environment of an organization. This study investigated strategic responses of New Kenya Co-Operative Creameries Limited to the changing environmental conditions. The objectives of this study were to establish the environmental changes affecting New KCC Limited and then establish the strategic responses adopted by the organization in the face of these changes, and to document the relevant responses made. This study was guided by the theory that organizations are both environment dependent and environment serving, in that organizations obtain resources from the environment, transform them, and thenrelease them back to the environment as finished products that are sold through the markets. The environment in which organizations operate is continuously changing with different factors influencing them. These environmental changes shape opportunities and challenges facing organizations hence the need to adjust to these changes to remain successful in future. In order to meet the objectives of the study, pertinent primary and secondary data was collected. Secondary data was obtained from the company’s records and website while primary data was obtained by conducting in-depth personal interviews with New KCC Limited heads of departments and selected managers who are involved in the strategy formulation and implementation. The research design entailed utilization of qualitative techniques for data collection to better understand how New KCC Limited has responded to the environmental challenges facing the company. This design was appropriate as it provided insights into the research problem by describing the challenges and responses in details. The data was then analyzed using content analysis method. The study established that changing competitive situations in Kenyan dairy industry has posed some challenges to New KCC Limited and these challenges arose from changes in the business environment in terms of economic decline, legislative changes, increased technological advancement and liberalization of the dairy industry which opened doors for many players that ate into New KCC market share. According to the research findings, New KCC has identified challenges facing it from the environment and has responded to these challenges through such initiatives as new products development, adoption of Systems Applications and Products (SAP) in Enterprise Resource Planning (ERP) to increase precision in monitoring of production and sales activities and engaging in intensive sales and marketing activities. These have made New KCC Limited cope with its challenges but have not adequately enabled the organization to fully match its environment. In view of this, the researcher recommended that New KCC should become more proactive rather than being reactive in managing its changing environment through formulating and implementing strategic initiatives that would pre-empt any anticipated adverse changes in its environment. The limitations of the study identified by the researcher were due to time constraint and lack of commitment of some respondents due to their busy schedules. The researcher also suggested that further studies should be carried out in future to evaluate the success of strategic responses adopted by New KCC Ltd since this would shade light on whether the strategies adopted help to create competitive advantage or not.