Relationship between tea value addition strategies and performance of Kenyan tea exporting companies

Abstract

Today‟s dynamic business environment is continuously changing because of globalization, regulatory changes, increasing intensity of competition, increasingly demanding customers, new information technology, and mergers and acquisitions. This has resulted in markets that can be characterized as increasingly turbulent and volatile and has caused many organizations to seek competitive capabilities that enable them to exceed customers‟ expectations and enhance market and financial performance. Firms are increasingly adopting value addition strategies in order to reduce costs, increase market share and sales, and build solid customer relations. The study was to establish relationship between tea value addition strategies and performance in the Kenyan tea exporting companies. The research design adopted was cross sectional descriptive design. The population of the study comprised of all the 64tea exporting companies operating in Kenya. The study used primary data which was collected using selfadministered questionnaires. The data collected was analyzed using statistical package for social sciences and presented in tables. The study found out that value addition helps the companies create awareness among customers for their products and services but also serves as a useful vehicle in promoting brand image of products and services offered at the target market. The study further established that Tea value addition enables an organization to change the rules of the game and create that uniqueness that is more valuable and with the rising global competition in the value added market, and particularly for the value added black tea, factors such as quality, standards on food safety, maximum residue levels, and labeling rules are expected to have a major effect on price realization. The study recommends that with rising global competition in the value added market, and particularly for the value added black tea, Kenya exporters should be conscious of the need to bring about vertical integration in its traditional tea bulk exports and are now into converting a major portion of tea exports to consumer packs and other forms of value added exports, meeting the requirements of more sophisticated markets. A further research should be undertaken to further explore the relationship of value addition to the tea industry employing bigger samples and carrying out a more detailed analysis of firms The study concluded that there exists a relationship between tea value addition and organizational performance.