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.
Citation
M.Sc.Publisher
University of Nairobi School of Business, University of Nairobi
Description
Master of Business Administration (MBA)