Strategic Thinking and Performance of Milk Processing Firms In Nyeri County, Kenya

Abstract

The milk processing firms in Nyeri County are in different stages of development but undertaking diverse strategic initiatives aimed at developing and improving their performance across the convoluted value chain ranging from milk collection, processing, and marketing. However, the firms are still experiencing challenges in performance mostly as a result of poor response to market changes, lack of innovations and inefficiencies. The study sought to find out the role of strategic thinking on performance by investigating the effects of strategic thinking on the performance of milk processing firms in Nyeri County, Kenya. The study targeted the milk processing firms that collect, process and market various milk products in Nyeri County and exclude those that just collect milk and processed elsewhere. The general objective of the study was to investigate the effect of various aspects of strategic thinking on the performance of milk processing firms in Nyeri County. The specific objectives of the study were; to investigate how refining of competitive strategies affect the performance of the milk processing firms, effect of environmental scanning on the performance of the milk processing firms, how stakeholders’ engagement affected the performance of the milk processing firms and the effects of business process redesigning on the performance of milk processing firms in Nyeri County. The study targeted all five milk processing firms that collect process and market milk products in Nyeri County. The respondents of the study were the entire top management of the milk processing firms that comprised of some 76 officers. Questionnaires were the data collection tools used in the study. The questionnaires were administered using drop and pick method. The data was coded and entered into Statistical Software for Social Science (SPSS) where both descriptive analysis and inferential analysis of multiple regression analysis was done. The study found that strategic thinking had a positive and significant effect on the performance of milk processing firms in Nyeri County. Refinement of competitive strategies had the largest positive effect on performance while re-designing of business processes had the least but positive effect on the performance of milk processing firms in Nyeri County. The study concluded that strategic thinking had significant and positive effects on the performance of milk processing firms in Nyeri County. As found out in the multiple regression analysis, all the combined strategic thinking activities of refinement of competitive strategies, environmental scanning, stakeholders’ engagement and business process re-designing had an effect on the performance of milk processing firms in Nyeri. The study recommended that strategic thinking among milk processing firms should be data-driven. Geared towards adjusting to market needs and supported by regular market surveys.