Competitive Strategies and The Performance of Dairy Cooperatives in Meru, Kenya

Abstract

Business organizations worldwide strive to grow and increase sales and profits. Growth is imperative and not an option as it helps in turning a small company into a big one, and it is never easy. Therefore, companies have to adopt suitable competitive strategies to boost organizational performance. The stiff competition among various milk-processing firms and cooperatives in Kenya has led to collapse of some of diary firms. In efforts to compete and increasing profitability, companies in the milk-processing sector have adopted various competitive strategies. This study sought to establish the influence of some of those strategies on organizational performance of dairy cooperatives in Meru County, Kenya. Specific objectives of this study was to determine: the influence of market penetration strategies on organizational performance of dairy cooperatives in Meru County, Kenya, the influence of market expansion strategies on organizational performance of dairy cooperatives in Meru County, Kenya, and whether joint venture strategies have got any effect on organizational performance of dairy cooperatives in Kenya. This study adopted a descriptive survey research design with an aim of obtaining complete and accurate information giving precise precision in achieving the objective of the study. The study was confined to the 42 dairy cooperatives in Meru County, Kenya. The targeted population comprised of the 42 dairy cooperative societies in Meru county, the total population was 131 respondents which comprised those in the position of general managers, assistant managers, marketing managers and officers from the Ministry of Agriculture, Livestock and cooperatives. The sample size was 99 respondents. Stratified random sampling technique was used to select the sample. Semi structured questionnaire was used to collect data from the respondents. Multiple regression analysis was used to determine the effect of the three variables on organizational performance of the co-operative societies. Regression analysis results indicates that adoption of market penetration strategies had a positive and significant influence on performance of dairy co-operatives as shown by (Coef/beta =0.259, P-value= 0.001). Market expansion strategy activities and joint venture strategies had a significant effect on the performance of co-operatives (Coef/beta =0.276, P-value=0.049) and (coef/beta was 0.294, P-value = 0.042) respectively. This was an indication that the three strategies are relevant to dairy co-operative societies, and should be embraced if the dairy co-operative societies are to create competitive advantage to enable them to compete well in dairy industry. Based on the findings, the study recommends that the dairy cooperatives need to adopt the three competitive strategies to deal with competition in the dairy industry. The researcher also recommends that co-operatives processing dairy products should focus on entering new markets with their new and current products.