The Effect of Market Forces on Performance of Dairy Industries in Kenya. A Case of Kenya Cooperative Creameries
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Date
2015
Authors
Chege, Peter Maina
Bula, Hannah Orwa
Journal Title
Journal ISSN
Volume Title
Publisher
International Knowledge Sharing Platform
Abstract
Milk and milk products consumption is common throughout the world. Dairy industry is one of the food
industries that make a big contribution to the income of Kenyan farmers as well as food for Kenyans. Kenya
Cooperative Creameries (KCC) has been the sole formal sector dealing with milk for over 60 years. However,
the milk sector was liberalized in 1992. A lot of research has been done on how strategic practices affect
performance. However, there exists minimal information on how market forces affect performance of dairy
industries in Kenya. It is in this view that this study aimed at assessing the market forces and performance of
dairy industry a case of KCC. A cross sectional analytical research design focusing on a case study was adopted
for this study. This study targeted a sample of 32 senior management staff of KCC. A research-administered
questionnaire and an observation check list was used to collect information on strategic management practices
and performance indicators. Tools were tested for validity and reliability. Data was coded, cleaned and analyzed
using SPSS software. Descriptive statistics such as frequency, means and percentages were used to summarize
the data. Chi-square test was used to establish the relationship between study variables. Qualitative data from
open ended questions was analyzed by coding, combining similar responses together and determining the
emerging themes. Results show that the main challenges faced by KCC are the threat of new entrants, which
reduced sales, threat of substitute products which led to price reduction, the bargaining power of customers to
lowering of prices so as to maintain these customers, bargaining power led to procurement of milk at a lower
price. In addition, the intensity of competitive rivalry led lowering of prices leading to low income. This study
concludes that the type of market forces adopted affected performance. These are the entry of new firms,
presence of substitute products in the market, the bargaining power of customers and suppliers and the
competitive rivalry is a major determinant of the competitiveness of the firm.
Description
A research article published in European Journal of Business and Management
Keywords
Market forces, performance, dairy industry
Citation
European Journal of Business and Management. Vol.7, No.35, 2015