Strategic Change: The Influence of Scope of Strategies and Specific Product Dimensions on Organizational Performance

: This paper examined the influence of scope of strategies and specific product dimensions on performance of firms in the alcohol industry in Kenya. Previous studies dwelt on effect of limited aspects of strategic change such as marketing leaving out critical aspects like financial, distribution and cost control strategies. The study was anchored on the Resource-Based Theory (RBT). The study adopted a qualitative research design of cross sectional type. The population was 25 local firms registered by Kenya Revenue Authority by 2012 and approved by National Authority for the Campaign Against Alcohol and Drug Abuse, (NACADA) by 2015. A saturated sample consisted of 100 respondents to get primary data. Descriptive statistics and thematic analysis were used to determine the relationship between scope of strategies and organizational performance. Findings revealed that there was a fairly positive relation between scope of strategies and organizational performance. The cultural shift from rural based to urban living families in the recent years has also exposed young generation to alcohol. Media influence has had an effect on increasing young drinking population. Heavy investment on superior technology has guaranteed high volume of products for sale. Through technology consumers are able to access information about products and services, products reach consumers faster and conveniently and it influences how decisions are made in firms. Its helps increase efficiency and require technically qualified manpower. In addition, beer markets have also that main marketing advantage is derived from building of strong brands. For this reason, the character domestic markets is determined by the main in each country with a secondary imported brands. The largest manufacturing firms also have the most intricate and effective distribution facilities. collection can be subjective. This study sought to use questionnaire to collect data. There was need to focus on a number of alcohol industry firms that experienced the change other than one firm to establish the relationship between scope of strategies and performance. In addition the study failed to address the scope of strategies the firms have employed and how they have affected the performance of similar firms. Therefore, the relationship between distribution, financial and marketing strategies as constructs of scope of strategies and organizational performance in alcohol industry in Kenya needs to be established. The study mainly used primary data collected on different aspects of scope of strategies and performance obtained from senior managers conversant with key strategic issues who were issued with questionnaires. The respondents who are senior managers considered key resource persons in matters of strategy were first contacted via introductory letter to inform them about the purpose of the study. The main instrument for data collection was a semi structured questionnaire since they are fast, cheap and can be self-administered (Mugenda and Mugenda, 1999). Primary data was collected using interviews with firms‟ employees who are personally involved at different stages of the change process. The literature has long maintained that the chief executive officer (CEO) should be the single respondent in such studies as they are considered to possess the most overall understanding and knowledge of the firm`s strategy and performance (Byars, 1984; Elbana and Child, 2007). This study used respondents‟ perceived organizational performance measures. This was consistent with studies by Newbert Perception-based performance measurement is common in strategy research (Hall, 1992, 1993; and Dyer, 2004). Several researchers (Dess and Robinson, 1984; Spanos and Lioukas, 2001) suggest that even if information is obtained by subjective measures in a sample survey research, the results are often very accurate since the measurement instrument is specifically designed to address the research questions. A five point Likert-type scale ranging from 1=low to 5= highest was used. Performance measures were limited to sales growth and return on sales. Other measures such as profitability were omitted because of the desire to obtain a large response rate. This study collected data and information from the respondents who provided sufficient information on issues regarding the relationship of scope of strategies and specific product dimensions on organizational performance of firms in the alcohol industry in Kenya. Reliability of the instrument for data collection was tested by assessing the scale‟s internal consistency- the degree to which the items that make up the scale „hang together‟. The internal consistency of the constructs was tested by internal consistency method using Cronbach`s Alpha coefficient. Reliability analysis was carried out on Two thirds of the respondents disclosed that distribution strategy is not totally selective and that advertising and marketing are taken into account. It is evident that a balance between distribution, marketing, financial and cost control drive firm performance. The findings of the study reveal that majority of the senior managers of the firms in the alcohol industry confirmed that their organizations had carried out a widespread marketing research to a large extent in order to find opportunities and reduce threats as reflected in mean rating of 3.76 and standard deviation of . 90. This is echoed in the views of one of the interviewees: market pharmaceutical manufacturers and Trinh and O`Cnnor (2002) focused on strategies to control costs, market share, efficiency, and financial performance in the health sector. However, the studies failed to incorporate the element of distribution as an aspect of scope of strategies. However, this study, using the dimensions of scope of strategies such as marketing, distribution, financial and cost control, sheds light on the significant contribution of scope of strategies on performance of alcohol firms in Kenya. Therefore, the findings of this study provide further evidence not adduced by previous studies on the application of multiple strategies focusing on financial, marketing, distribution and cost control on performance. A few studies have tried to understand the influence that scope of strategies has on organizational performance. The findings of this study are inconsistent with Trinh and O`Cnnor (2002) who studied the impact of strategic change on performance of United States Urban hospitals. It encompassed two major types of strategies: Strategies to enhance business with health maintenance organizations (HMO) and strategies to control costs; market share, efficiency, and financial performance observed across the 1994 to 1996 time period. The study found that strategic change that contributes positively to one type of performance can negatively impact the other. For example, whereas increased affiliation with HMOs led to improvements in revenue market share, signing more contracts with HMOs meant market losses to both revenue and patient days. However, the study failed to incorporate distribution and marketing constructs of scope of strategies to establish their effect on performance. The inconsistency could be due to the context of the studies that varied considerably. The other possible explanation to the contradiction is the method of analysis used, the strategies adopted and the performance parameters used in each case. While the study used Linear Structural Relations (LISREL) path analysis this study used regression analysis. However, considering the views of the respondents per se the results on financial and distribution strategies contrast with findings on marketing strategies. To this extent the results agree with the findings of Trinh and O`Cnnor (2002). The results are consistent with findings of Mohammadzadeh, Aarabi and Salamzadeh (2013) who