Value Addition as a Strategic Management Practice and Determinant of Performance of Tea Industry in Mount Kenya Region

Abstract

The global tea industry is lucrative and competitive; turning in billions of dollars annually but the prices small holders' tea producers receive fail to reflect the high quality of their produce. In Kenya, Tea industry has not been competitive. As a result, the earnings have not been commensurate with tea production efforts that have often attracted the wrath of farmers to the extent of tea picking boycotts, uprooting of tea bushes, destruction of factory property and even threatening the lives of tea industry managers. This study examined strategic management practices that can determine performance of tea industry in Mount Kenya region so that it can remain competitive. The specific objectives were to determine how value addition related to performance of tea industry in Mt Kenya region in Kenya. The significance of this research is adding information to the existing knowledge and provide a platform for more studies, enhancement of Tea industry performance in Mt Kenya region in Kenya and globally. The study was guided by Value Chain Analysis Theory model and Cost Leadership theories. Mixed methods research design was used. The target population was 117 management team comprised of five regional management team ; regional accountant, operations manager, production manager, auditor, and 112 top management in 16 factories who include, 16 manager 16 production managers 32 accountants 32 training managers and 16 field coordinators sixteen factories that lie in Mount Kenya region. Stratified, simple random sampling was used to select 92 respondents out of 112 based on Krecjie and Morgan Table. Purposive sampling was used to select five regional managers. Data was collected using questionnaires, focus group discussion and document analysis. Reliability was examined using pilot study and internal consistency test. Regression analysis indicated that value addition strategy have a strong positive relationship with financial performance of the tea industry In Mount Kenya region. Regression results also established that value addition have a strong positive relationship with financial performance of the tea industry in Mount Kenya region. Based on the findings of the study, it can be concluded that strategic management practices influence performance of tea industry in Mt Kenya region in Kenya positively. Tea factories should continue investing in value addition strategies in specific operational areas because they are able to control their costs much better as compared to addition of more collection centers or more field visits. Consumers will realize higher Tea prices through branding which increases loyalty.

Keywords: Strategic Management, Value Addition, Performance & Mt. Kenya Region.