Generic strategies employed by food and beverage firms in Kenya and their effects on sustainable competitive advantage

Abstract

The focus of this study was on competitive strategies that firms adopt in the Kenya beverage industry in order to create above average performance. The fundamental basis of above industry performance is sustainable competitive advantage which is either created by low cost or differentiation strategy. The study aimed at establishing the generic strategies food and beverage firms in Kenya employ for sustainable competitive advantage. This research entailed a descriptive study design. Descriptive design uses a set of scientific methods to collect raw data and create data structures that are used to describe the existing characteristics of a defined target population. This study sought to do that among the F & B firms in Kenya. The study population consisted of 138 food and beverage manufacturing firms in Kenya registered with the Kenya Association of Manufacturers (KAM) by 2011. The data was tested for central tendency and dispersion after confirmation of normal distribution by appropriate tests of normality. Since the sample size was 32 (over the minimum 30 required for statistical analysis), regression analysis was carried out and interpretation of results of tests of hypothesis done. The research showed that 56.2 percent of the firms embrace duo strategies of cost leadership and differentiation simultaneously while 25 percent were exclusively on cost leadership and 18.8 percent were exclusively using differentiation. The use of dual strategies is a company survival tactic in terms of diversification of risks especially in very competitive environments like that of the Kenyan F&B industry. Results from Pearson’s rank correlation coefficient between the dependent variable Y and the independent variables X1 and X2 gave coefficients of 0.653 and 0.279 respectively which was an indication of positive correlation.