Value Chain Analysis and Organizational Performance of Beer Manufacturing Companies in Kenya

Abstract

The main objective of this study was to determine the value chain activities, establish Key factors influencing these activities and how they contribute to performance in the beer brewing industries in Kenya. The study was guided by the following objectives: Determine the factors influence the value chain in the beer manufacturing industry, to determine how beer manufacturing firms in Kenya use value chain approach to assess performance and to establish the relationship between value chain analysis and organizational performance in the beer manufacturing industry in Kenya. The study adopted a cross sectional descriptive survey intended to establish the activities that constitute the value chain and extent in which these activities affect performance in the beer manufacturing industry in Kenya. The target population of this study was 50 value chain professionals; these were managers and heads of departments of five beer manufacturing firms in Kenya. Primary data was collected using semi structured questionnaire that was administered by drop and pick methods and through E-mail. Data from questionnaires was summarized, coded, tabulated and analyzed. Editing was done to improve the quality of data for coding. Coded data was then fed into the statistical package for social sciences (SPSS) version 21. Linear Regression Analysis was used to investigate on the relationship between the variables and the organizational performance of beer manufacturing companies in Kenya. From the study findings it was established that the main factors that influence the value chain in the beer manufacturing industry in Kenya were timely delivery times of products and services, waste reduction, well managed procurement costs, use of modern information technology, effective human resources management, efficient firm infrastructure and continuous improvement. The study recommends that value chain professionals in the alcoholic beverage industry embrace collaborative relationships with their suppliers so as to optimize their value chain costs. Technology was also viewed as one of the failures in achieving a sustainable value chain performance and indications from the findings of its crucial role in the implementation suggest that firms should also invest in information technology not only in their firms but also in partnership with suppliers so as to streamline operations in the value chain.