Strategic Responses to Competitive Environment by South Nyanza Sugar Company Limited

Abstract

Competitive environment is crucial to a firm's success since no business functions in a vacuum. As a result, a company needs to develop a competitive advantage to overcome threats provided by its competitive environment. The sugar industry in Kenya has experienced myriad of problems posed by operating environment. As a result self sufficiency in sugar for the country has remained elusive over the years as consumption continues to outstrip supply.

Past research has shown that Kenyan sugar companies have remained uncompetitive due to stringent operating environment and political interferences. Kenyan sugar companies must therefore craft strategies that will ensure the survival of their businesses by effectively responding to competitive environment. This research was thus carried out to examine how sugar companies in Kenya are strategically responding to challenges posed by their competitive environment.

The research was a case study on South Nyanza Sugar Company, a local sugar company and data was collected through interviews. Some of the findings of the study are that - SonySugar has strategically responded to the influence of its competitive environment through diversification by introducing other products such as cogeneration to increase their revenues streams and by undertaking aggressive marketing to reach most of its customers. They have also revamped their information technology platform through installation of enterprise resource planning to ensure timely availability of information for decision making.

The recommendations of the study are that SonySugar should pursue government assistance to convert their debts into equity and also to provide them with guarantee to enable them source cheap funds to implement their identified strategies. The company's privatisation should also be pursued to reduce the current political interferences that hinder its smooth operation.