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.
Publisher
University of Nairobi