Analysis of Related Diversification Strategy on Organizational Performance of Cement Firms in Kenya

Abstract

Cement manufacturing firms in Kenya have experienced a decline in performance. The firms have turned to innovative products diversification such as pre-cast concrete paving blocks and precast molded products. This research purposed to analyse related diversification strategy influence on organizational performance of Kenyan cement firms’. The study was backed up by resource-based review theory. The study was done in cement industrial sector in Kenya and all cement manufacturing firms were studied. The study used descriptive cross-sectional research design in collecting data relating to the research objective. The target population of research was all the marketing, finance, production managers and assistant managers from the same departments who were used as important informants. The study had a total of 108 managers and supervisors as its target population. This being a census study, all the marketing, finance, production managers and their assistants were used in this study. In piloting of study tool, respondents were nominated from Savannah cement and were having the same noticeable features as those of main study. The scholar used questionnaire as a tool to collect data from the key informants. The quantitative technique was used to analyse data where descriptive and inferential statistics were used. Related diversification strategy has significant influence on the performance of Kenyan cement firms. The related products are produced using same machinery making the cement companies to realize economies of scale for better performance. Firms aiming at increasing their performance should adopt related diversification strategy to meet the customers’ demands.

Keywords: Related Diversification Strategy, Organizational Performance, Kenyan cement firms

DOI: 10.7176/EJBM/14-22-03

Publication date: November 30^th 2022