Competitive Strategies and Performance of Coconut Processing Firms in Kilifi County, Kenya

Abstract

Kenya’s economy has long depended on agriculture for employment, food security, and economic growth. In the coconut industry, value addition remained limited despite the sector’s economic potential, creating a need for strategic interventions to strengthen processing activities. Kilifi County, a major coconut-producing region in Kenya, faced challenges including high production costs, short shelf life of products, automation pressures, and financial constraints. This study examined the influence of competitive strategies on the performance of coconut processing firms in Kilifi County, focusing on differentiation, cost leadership, and focus strategies. The study was guided by Resource-Based View, Dynamic Capabilities Theory, Porter's Five Forces, and the Balanced Scorecard. A descriptive survey design was adopted, targeting 26 coconut processing firms engaged in value addition. Data were collected from operations managers, accountants, and marketing officers using semi-structured questionnaires, achieving an 89.7% response rate. Descriptive statistics and inferential analysis, including Pearson’s correlation and multiple regression, were used to analyze the data. Findings revealed that competitive strategies significantly influenced both financial and non-financial performance. The adjusted R² value of 0.785 indicated that 78.5% of the variation in firm performance was explained by the three strategies. Cost leadership had the strongest effect, followed by differentiation and focus strategy. The study concludes that integrating these strategies enhances competitiveness and sustainability. It recommends investment in value addition, operational efficiency, and niche market specialization, while future studies should examine technological innovation and strategic alliances across regions and industries.