Competitive strategies and performance of registered small and medium food and beverage manufacturing firms in Nairobi county, Kenya.

Abstract

Small and medium food and beverage manufacturing firms play an integral part in revenue generation in Kenya’s economy and as avenue for employment opportunities for unemployed Kenyan youths. With globalization and current economic trends in the market, many of the food and beverage manufacturing firms face fierce competition that hinders their growth potential. This presents a need for these firms to adopt competitive strategies to help them cut a niche in the industry. Therefore, this research aimed at determining the influence of competitive strategies on performance of small and medium food and beverage manufacturing firms in Nairobi County. This research was supported by the following objectives: to investigate the impact of cost leadership strategy on the performance of small and medium food and beverage manufacturing firms in Nairobi County; to determine the effect of differentiation strategy on the performance of small and medium food and beverage manufacturing firms in Nairobi County; to examine the effect of focus strategy on the performance of small and medium food and beverage manufacturing firms in Nairobi County and to establish the effect of innovative strategy on the performance of small and medium food and beverage manufacturing firms in Nairobi County. This study was grounded on Competitive Advantage theory and Competency-based theory of the firm. The research used descriptive design and targeted 18 registered small and medium food and beverage manufacturing firms in Nairobi County. Simple random sampling was used to select the sample in conjunction with purposive sampling technique to ensure only respondents with desired information were selected in the study. Structured questionnaire was used to collect primary data. Data collected was analyzed using statistical packages for social sciences (SPSS) version 28 and presented in tables, charts and graphs. Multiple linear regressions model was used to establish the relationship between the independent variables and the dependent variable of the study. Findings showed that cost leadership, differentiation strategy, focus strategy and innovative strategy, positively and significantly influence performance of small and medium size food and beverage manufacturing firms in Nairobi County with beta coefficient values ranging from 0.524, 0.535, 0.431 and 0.423 respectively. As a result, the researcher determined that all four competitive strategies examined in the study had a substantial impact on the performance of small and medium food and beverage manufacturing enterprises’ in Nairobi County. Furthermore, the researcher recommended that small and medium food and beverage manufacturing enterprises’ management should adopt competitive strategies in order to meet their performance targets. The study also suggests that further research be conducted to examine policy implications on the adoption of competitive strategies in Kenyan small and medium food and beverage manufacturing enterprises’, as the current study was mainly oriented towards the adoption of competitive strategies and the subsequent influence on their performance.