Organizational Mergers and Sustainable Competitive Advantage Of Almasi Beverages Limited, Kenya
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Date
2023
Authors
Kanyingi, Brian Muiruri
Journal Title
Journal ISSN
Volume Title
Publisher
Kenyatta University
Abstract
In recent times, sustainable competitive advantage has become a common phenomenon
worldwide. Organizations have been forced to adopt sustainable competitive advantage as a
crucial strategic tool to deal with the ever-increasing global market competition. In many
companies, mergers are strategic growth plans which not only helps them stay in
competition but also extends their dominance, market share and margins in the global
setting. Mergers facilitate firms’ fast growth and a capital market discipline mechanism
improving efficient management and profit maximization. The goal of the study was to
evaluate how the Kenyan beverage industry sustainable competitive advantage was affected
by mergers. Specifically, the study sought to investigate the effect of economies of scale,
diversification and also synergy on sustainable competitive advantage of Almasi Beverages
Limited in Kenya. The study was underpinned on the following theories; the theory of
efficiency, the resource-based view theory, and the hubris theory. The research utilized the
descriptive research design. Secondary and primary data was utilized. Primary data was
collected using a questionnaire. Blank responses were not included when analyzing the data.
Descriptive statistical methods such as mean, frequency, percentages were used for analysis.
Research findings were presented through graphs charts and tables. Findings revealed that
revealed that Almasi Beverages sustainable competitive advantage was positively and
significantly influenced by economies of scale, by diversification, and by synergy. The
study concluded that economies of scale led to the firm enjoying large discounts and
cheaper more affordable prices, improved capital equipment and production processes, and
having quality managers working in various departments. Diversification led the firm to
have a wide range of products on their product line, new designs within the organization that
were aesthetically designed and were more superior in branding, and new products offerings
in the organization contributed to sustainable competitive advantage. Synergy led the firm to
have a stronger bargaining power for inputs, stronger bargaining position for cost of capital,
and ensuring that the organization was running efficiently and in an effective manner,
expediency of the logistics team in terms of their speed and responsiveness, and financial
independence would all enhance the organizations sustainable competitive advantage. The
study recommends that the organization should adopt a culture of continuous improvement
in the area of product improvement through innovation to ensure that it gives the firm
sustained competitive advantage in the long run. In order to remain different from
competitors, Almasi Beverages should focus on high product quality, fast delivery, design
and new products, and unique product features. To achieve this, the study recommends that
the firm should embrace differentiation as the key competitive strategy and set sufficient
resources. Further, positive competitive advantage should be attained by more beverage
firms in Kenya through their firm consolidation via the merger strategy.
Description
A Research Project Submitted to the School of Business, Economics and Tourism in Partial Fulfillment for the Award of a Degree in Master of Business Administration (Strategic Management) of Kenyatta University, May 2023.
Keywords
Organizational Mergers, Sustainable Competitive Advantage, Almasi Beverages Limited, Kenya