DIVERSIFICATION STRATEGIES ON NON-FINANCIAL PERFORMANCE OF CASHEW NUT COMPANIES IN KILIFI COUNTY
Abstract
Cashew nut companies in Kilifi County play a vital role in supporting rural livelihoods, generating employment, and contributing to economic development in Kenya's coastal region. However, these companies continue to encounter persistent difficulties in achieving optimal non-financial performance outcomes, including consistent product quality, reduced post-harvest losses, and sustained customer satisfaction. Despite targeted efforts to revitalize cashew production, sector performance remains constrained by declining yields, infrastructural limitations, and inadequate value addition therefore the study sought to assess the effect of diversification strategies on non-financial performance of cashew nut companies in Kilifi County. The study was anchored on the Ansoff Matrix model. A descriptive survey research design was adopted, with the target population comprising 10 cashew nut companies in Kilifi County and a total of 60 department heads across operations, finance, marketing, production, human resources, and supply chain functions. A census approach was employed, incorporating all 60 respondents. Primary data were collected through self-administered semi-structured questionnaires. Instrument reliability and validity were established through a pilot test conducted in two cashew nut companies in Mombasa County, with face and content validity confirmed via expert review and Cronbach’s Alpha ensuring internal consistency at a threshold of 0.7. Data analysis utilized descriptive statistics (percentages, frequencies, means, and standard deviations) and inferential statistics (Pearson correlation and multiple linear regression), with diagnostic tests performed to verify normality, absence of multicollinearity, and no autocorrelation; results were presented in tabular form. The findings revealed a strong, positive, and statistically significant relationship between diversification strategies and non-financial performance (r = 0.757, p = 0.000). The study concluded that diversification strategies serve as a critical mechanism for extending internal resource capabilities, thereby fostering operational resilience, stakeholder trust, and long-term sustainability within the cashew nut sector in Kilifi County. Accordingly, it is recommended that company management prioritize investment in value addition and product innovation, while policymakers and industry associations facilitate technology transfer, research funding, and conducive conditions for agro-processing to support diversified growth and improved non-financial outcomes.