Evaluation of the relationship between porter’s generic competitive strategies and organisational performance among agro food processing firms in Nakuru and Kericho counties in Kenya

Abstract

The study sought to evaluate the relationship between Porter’s generic competitive strategies and organizational performance among agro food processing firms in Nakuru and Kericho Counties in Kenya. Specific objectives were;- to determine the relationship between utilization of focus strategy and organizational performance, to determine the relationship between the utilization of cost leadership strategy and organizational performance , to determine the relationship between differentiation strategy and organizational performance and to determine the combined effect of Porter's generic competitive strategies focus, differentiation and cost leadership on organizational performance. The target population was agro food processing firms in Nakuru and Kericho Counties. A cross sectional survey was conducted involving 53 large and medium agrofood processing firms. Primary data was collected using structured questionnaires administered to a management staff in each of the agro food-processing firm. Data was analyzed with help of the Statistical Package for Social Sciences (SPSS) version 17.0. Both descriptive statistics and correlation analysis were used to analyze data. The findings from the study indicated that focus and differentiation strategies significantly influenced organizational performance in terms of growth in market share; cost leadership strategy did not significantly influence organizational performance among agro- food processing firms in the study area. Cost leadership, differentiation and focus strategies were found not to significantly influence organisational performance individually, however the combined Porter's generic competitive strategies were found to significantly influence organisational performance.Consequently, this study made the following recommendations: the managements in the agro-food processing should strengthen utilization of all the Porter’s competitive strategies in order to realize meaningful performance among agro- food processing firms; increase the level of research and development in production; diversify their products as well as undertake regular product re-launch or re-design and promotion and effectively implement the Porter’s competitive strategies in order to realize increased levels of organizational performance especially in employee productivity, revenue per employee and profitability margins.