Strategic responses to environmental challenges by Kenyan horticultural exporters

Abstract

Business organizations are open systems and therefore depend on the environment in which they operate for success. It is therefore important for organizations to formulate strategies that will help them exploit the opportunities in the environment and minimize threats. The horticultural industry has not been spared by the environmental changes. It is facing many environmental challenges which include the flight miles campaign, Economic Partnership Agreements (EPA's) that will result to new terms of exports for the Kenyan horticultural export companies which will have to comply with a new range of conditions, to be able to trade and compete effectively in the EU market. Others are increased competition especially from China and changing weather patterns making supply of products to the market all year round a challenge to most organizations. The objective of this study was to establish the strategic responses that the horticultural companies have adopted in the face of current environmental challenges. The target population was firms registered under Fresh Produce Exporters Association of Kenya (FPEAK). A sample of 20 companies was randomly drawn. The main findings were that the changes had a very adverse impact. On analysis of specific challenges, the following was evident. Change of tariffs was ranked as the challenge that posed the highest impact in the industry. Competition followed with the majority of the organizations reporting the change to pose a high impact. Climate change VI was ranked third with most organizations reporting the impact as fair. Air miles was reported as posing the lowest challenge of the four. It was found that majority of the organizations had initiated strategies most of which were targeted for specific challenges. Strategies used for change of tariffs included cutting costs which· majority of the companies have resorted to. Others include increasing the market share and diversification into new markets especially the Middle East and USA markets. Increased competition resulted to most organizations improving product quality. New markets, product development and diversification were also considered. The air miles campaign had the least response rate as most organizations felt that the government needs to intervene. The few responses considered included use of alternate transport and improved delivery efficiency. The threat of change of climate resulted to use of better technology and farming methods in the farming operations. Geo diversification and use of better plant breeds were also considered. The study recommended that the companies carry out continuous monitoring and evaluation of the strategies used to ensure they are effective. The responsibility of monitoring of the external environment and evaluation of strategies should be given to a strategic manager.