The Influence of Strategies in Sustaining Agribusiness: A Case of Poultry Farmers in Kasarani, Nairobi

A Research Project Report Submitted to the Chandaria School of Business in Partial Fulfilment of the Requirement for the Degree of Masters in Business Administration (MBA)The purpose of the study was to assess influence of strategies used by poultry farmers to sustain business. The research objectives used are; determining influence of cost leadership on sustainability of poultry business, establishing the influence of differentiation on the sustainability of poultry business and determining influence of niche strategy on sustainability of poultry business in Kasarani, Nairobi. A descriptive and explanatory research design was used by the researcher in this study. The dependent variable was sustainability while independent variables were Cost Leadership, Differentiation and Niche. The opinions of the stakeholders regarding strategies to sustain an agribusiness through Porter’s Generic strategies were explored using questionnaires. The study adopted cluster sampling which involves segmenting the sample into regions. Normally done if a population is found in a specific geographic area which is the case of poultry farmers in Kasarani. The population was approximately 250 and a sample size of 71 was picked. Out of the 71 questionnaires issued, only 68 were correctly filled and returned giving a response rate of 96%. Statistical software, SPSS, was used to enter, clean and analyze coded data collected. Pearson’s correlation coefficient analysis was used to analyze the relationships that exist between the variables and data presented on tables. The first objective set to establish whether cost leadership influences sustainability of poultry business. It was the main strategy used emphasis on restructuring cost chain to eliminate unnecessary cost producing activities. The researcher found out that business supports its products for a suitable cost advantage to outdo competitors and rely heavily on efficiency by cost controlling over value chain. It was also revealed that respondents were uncertain whether poultry business is low cost producer due to substantial capital it holds. However, respondents disagreed business sets industry price to earn a profit around its market position. The second objective set to establish whether differentiation influences sustainability of poultry business. Differentiation strategy was as well used but highly controlled by cost cutting. It was revealed that majority are uncertain whether business markets unique products for varied customer groups. An analysis on quality products supported by good services at premium prices a majority were uncertain if the business creates customer value. The findings also established uncertainty in use of technology to remain on the cutting edge of innovation. The study also revealed uncertainty in increase of market share due to high quality products.as well as a unique source that competitors cannot imitate quickly. Nonetheless, a majority disagreed that customers are less sensitive to prices. The third objective set to establish whether niche influences sustainability of poultry business. Cost leadership a type of Niche strategy was used to some extent in this study. The findings revealed that a majority had identified a market niche and the business targets specific customers within the market. A majority were uncertain whether business focuses entirely on low cost strategy or produces unique products that enhances value. It was established that most respondents disagreed business expansion on broader line which competitors cannot serve. Furthermore, most respondents disagreed on specialization of business in activities competitors cannot perform. It was also noted that majority were not in agreement with business developing its own set of barriers to make products difficult to imitate. The study concluded that poultry business achieves cost advantage by restructuring cost chain eliminating unnecessary cost producing activities. Efficiency in poultry business is fundamental for sustainability as cost cutting come into play to maintain status quo. It is very difficult for poultry business to set prices in the industry as most entities have low yearly revenues hence cut costs as much as possible. Differentiation is a challenge as customers are price sensitive. Most poultry firms try to incorporate technology to cut costs rather than innovate their products for a premium charge. Poultry business has a niche market that it serves targeting a specific customer in the market. The products enhance value to customers with unique attributes. Importantly, poultry business niche strategy focuses on cost leadership for efficiency. The study recommended poultry business to benchmark itself against competitors to determine if they are low cost producers. It also recommended poultry business to incorporate technology not only for cost cutting but innovate quality products that consumers want and lastly expand on broader line that competitors cannot serve. This study was only based on generic strategies: cost leadership, differentiation and niche. As much as regression analysis showed that all generic strategies were significant only 40.8% explained sustainability of agribusiness. Other strategies like Resource Based View and factors should be considered for more research to explain sustainability of agribusiness