Strategic Response Of KTDA (H) Ltd To Changes In Contemporary Economic Factors In Kenya
This research project focuses on strategic response of KTDA Holdings Ltd to changes related to contemporary economic factors of inflation rates, interest rates, exchange rates and international oil prices. According to Ansoff & Mcdonnel (1990) when a discontinuous change impacts on a firm both cumulative loss of profit and cost incurred in arresting and/or reversing the loss are said to occur. Firms should aim at minimizing the sum of the two combined losses which should also match the turbulence. There are three types of management responsive behaviours; reactive, decisive and planned. KTDA Holdings Ltd controls 60% of tea business in Kenya and serves over 580,000 smallholder tea growers spread in 16 counties of Kenya. Studies on strategic response to environmental changes in Kenyan context have previously been undertaken by various researchers but none of these studies focused on strategic response to the four contemporary economic factors therefore justify the undertaking. The objectives of the study were to establish strategic response of KTDA Holdings Ltd to changes in contemporary economic factors in Kenya and its effects on its business. Literature review involved a comprehensive review of published and unpublished work from secondary sources of data in the area under study. The research design used was a case study to allow for an in-depth exploration, exhaustive gathering of information and analysis of the topic under study. Primary data was obtained from KTDA (H) Ltd senior management staff through use of an interview guide and thereafter analysed through content analysis. (ix) It was established that in the last three years, business of KTDA (H) Ltd was affected by the contemporary economic factors. Effects included increased cost of inputs, high production cost, low interest income from deposits, high energy cost, poor returns, declining profit and growth. The organization detects discontinuous changes attributed to contemporary economic factors through regular review of documents. Strategic responses employed by KTDA (Id) Ltd to changing contemporary economic factors include diversification, restructuring, technology, and financial, human resource, procurement, business consolidation, and efficiency and cost management strategies. It was concluded that KTDA (H) Ltd mainly uses planned management behaviours to address effects of contemporary economic factors. Limitations of the research finding included lack of enough finances, limited time to undertake the research, limitations in movement, lack of enough data and lack of enough disclosure by some respondents. To broaden the study findings, the researcher recommends further study on management of strategic change in KTDA Holdings Limited. Findings of this study will provide useful information for decision making by various tea industry stakeholders in policy, theory and practice levels.