Strategic Assets and Performance of Food Processing Firms in Nairobi City County, Kenya
Kyengo, Justus M.
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The Food Processing firms contribute enormously to economic development in Kenya However; a critical analysis indicates that food processing firms are experiencing declining performance. Therefore, this study sought to investigate the effect of strategic assets on performance of food processing firms in Nairobi City County, Kenya. Specifically the study sought to determine the effect of Information Technology Capability, Marketing capability, Research, Development Capability, and Operational Capability on the performance of Food Processing Firms, Kenya. In addition, the study sought to determine the mediation effect of competitive advantage on the relationship between strategic assets and performance. Moreover, it determined the moderation effect of market condition on the relationship between strategic assets and performance of Food Processing Firms. The study was anchored on dynamic capability theory, resource based theory, organizational learning theory and Institutional theory. The study used positivism research philosophy and adopted both explanatory and descriptive research designs, specifically a cross-sectional survey design. The target population of the study was 102 registered Food Processing Firms in Nairobi City County in Kenya. Multistage probability sampling technique was used to select 31 firms who formed the unit of analysis and 155 respondents. Primary data was collected using semi-structured questionnaires. Drop and pick technique was used to administer the questionnaires. Quantitative data was analyzed through descriptive and inferential statistics. Descriptive statistic such as frequencies, percentages, means, and standard deviations technique was used to summarize the characteristics of the data while multiple linear regression analysis was used to test the hypotheses. Qualitative data was analyzed through content analysis. The study established that IT capability, marketing capability, research and development, and operational capability have a positive and significant effect on the performance of food processing firms in Nairobi City County. The study noted that market condition moderated the relationship between strategic assets and performance. Finally competitive advantage was found to partially mediate the relationship between strategic assets and the performance of food processing firms. The study recommends that to shore up their performance, Food processing firms should adopt Information Technology capability such as technological flow, trying new ideas and seeking out new ways of doing things. To increase performance, firms should make new products and services, advertise, increase the number of trademarks and adopt novel marketing. Additionally, firms should adopt creative methods of operations, automate their processes and use current technologies to increase their performance. Also food processing firms should form a lobby group that participates in shaping their market conditions and one that relays timely market information to members.