Growth strategies and performance of food and beverage manufacturing firms in Kenya.

Abstract

The decline in the manufacturing sector's performance in Kenya presents a significant hindrance to the country's socio-economic development. Therefore, understanding the effect of corporate growth strategies and the performance of manufacturing firms becomes crucial in devising effective strategies to enhance the sector's performance and align with the government's economic development agenda. Hence, the objective of this study was to assess the effect of corporate growth strategies on the performance of food and beverage manufacturing firms in Kenya. The research was guided by the following specific objectives; examining the influence of market development, market penetration, product development, and diversification on performance. To achieve this objective, the study drew on various theoretical frameworks, including transaction cost economics, dynamic capability theory, Ansoff matrix theory and the resource-based view theory. Employing a descriptive research design, primary data was gathered from a sample of 130 respondents selected from the food and beverage manufacturing firms registered with the Kenya Association of Manufacturers, out of a total target population of 192 operations managers. The selection of respondents was carried out using a simple random sampling approach. Yamane formula guided the determination of the sample size. The data acquired from 81 percent of the sampled respondents through a self-administered questionnaire was analysed using descriptive statistics and multiple linear regression. The results revealed that there exists a statistically significant relationship between market development, market penetration and diversification strategies and performance of food and beverage manufacturing firms in Kenya. However, there was no statistically significant relationship between product development strategy and performance of food and beverage manufacturing firms in Kenya. It was thus recommended that firms should develop tailored marketing strategies and innovative product features to attract new customers and explore untapped markets. Invest strategically in technology for seamless customer engagement and explore new distribution channels for expanded market reach.