Table of Contents
CHAPTER ONE ............................................................................................................................................... 2
1.0 INTRODUCTION ....................................................................................................................................... 2
1.1 Research Problem ............................................................................................................................... 5
1.2 The Research Boundaries (Limitations) .............................................................................................. 6
1.3 Research Methods .............................................................................................................................. 6
CHAPTER TWO ............................................................................................................................................ 11
2.0 THEORY ................................................................................................................................................. 11
CHAPTER THREE .......................................................................................................................................... 22
3.0 RESEARCH ENVIRONMENT.................................................................................................................... 22
CHAPTER FOUR ........................................................................................................................................... 24
4.0 EMPIRIA................................................................................................................................................. 24
CHAPTER FIVE ............................................................................................................................................. 42
5.0 CONCLUSION ......................................................................................................................................... 42
CHAPTER ONE
1.0 INTRODUCTION
Nakumatt is an extremely progressive company which is also managed well. The
foundation and establishment of Nakumatt enterprises was under the influence of Mr. Meganial
Shah in the year 1965 and it was based in Nakuru. It was only through smart work and
determination that the first Branch was actually opened at Ukwala Road in the year 1987 (Irungu
& Wanjau, 2011 Pg. 17-21). During this time, the company had established around eight
branches all over Kenya. Just to mention they had Nakumatt Mega which was found in the year
1992 as the Nakumatt Downtown was established in 1995 and the one in Likoni was founded in
1996. Since then, there have been many other branches that have cropped up.
In the year 1976, there was incorporation of the business and also expansion which took
place as they traded in a manner that they tried to sell their products to hospitals and schools
among other related institutions. There was increased demand for their products as a result of
their pricing techniques, competition and excellent provision of goods and services (Mbuthia &
Rotich, 2014 Pg. 34-35). The management and administration of the business was therefore
centralized state of all in the year 1987 (SOTA). The management of information was enhanced
by the incorporation of Information Technology. The Nakumatt Holdings Limited acts as a
Chain inclusive of supermarkets and more so Hypermarket retailers and household goods.
The outstanding nature of the company is via the provision of more comprehensive range
of goods and services under the influence of competitive prices (Dihel, 2011 pg. 8). In the
interval of the years 1997 and 1998, it started to market gift vouchers with names of very
prominent and leading businesses in the country. This particular marketing technique bore fruits
because the market was extremely attracted to trade with them as they made profit at their peak.
The definition of the term Supply Chain Management is all the required specific actions
for the creation of raw materials in to completely finished products in the consumers’ hands.
SCM encompasses the entire activities affiliated with both the upstream or more so downstream
arena flow and the transformational factor of raw materials to ready products for use. The
established relations in the supply chain management system are the fundamental factor that
stimulates the competitive SCM advantage (Werner, 2000 pg. 56-67). It more so improves the
link existing between all the stake holders of an enterprise so that stability of goods can be
maintained from the producers to the final consumers. The central part of the supply chain
management is the Operation. In this case, operation may stand for a manufacturing company or
rather a retailer or even an institution in the public sector.
At this point of the supply chain, particular organizations take up the business
responsibility of carrying out specific duties. The operation occurs in tiers thus allowing passage
from one firm to another for instance from the firm to the consumer (Li, Ragu-Nathan & Rao,
2006 pg. 86-89). In the downstream arena, the manufacturer sells the products they have to their
possibly available customers and then the chain continues as the dealers then avail the products
purchased from the manufacturers to the final consumers.
The first tier customers are therefore the dealers while the second tier customers are the
final consumers. The downstream or the physical management is whereby an interface is created
between the initial tier customers besides the operation (Mentzer, et al, 2001 Pg. 52-56). The
coordination of all the above processes in detail in the upstream and the downstream is what is
termed as the supply chain management. The final consumer is the determinant of the supply
chain management reason being that each stakeholder in the chain relies on them. This model of
management has hit the punch line in a variety of organizations as it contributes most on the
efficiency and proficiency of the organizational value. It is more so profits center of an
organization but not a cost center as many may assume it to be.
There has been an increased focus on the supply chain in recent years whereby
organizations have enhanced their concentration on it because of the key role it plays in any
business enterprise (Lambert & Cooper, 2000 Pg. 67-76). It is quite clear that the supply chain
management is a package of activities inclusive of coordination and planning of both the external
and internal activities which generally are dependent on each other in order to be functional.
More so, retail store outlets are an enterprise whereby products and services are both
directly sold to the final consumers in relatively smaller quantities. There is a variety of retail
store outlets inclusive of smaller ones and others carrying smaller sales while other are large and
make sales which add up to millions. The differences existing between diverse retail outlets are
in terms of merchandise breadth, operational methods besides ownership models, the types of
retail outlets entail specialty store which are naturally vast and always accommodate special
goods and more so services.
Their main focus is on a very special line of duty. Another type of retail outlet is the
departmental stores. They generally deal with a variety of goods and services under one roof. A
supermarket is also in the same line of duty since it enhances self-services for satisfaction of
customers wants totally (Reinartz, et al, 2011. Pg. 67-71). The diversification of supermarkets is
justified by all goods and services that are actually required by human beings. They service
maybe in terms of Music store, bookshops among others. A superstore entails around 35000
square feet of the space meant for transactions thus meeting all the consumers’ needs. A
hypermarket in terms of size may encompass 80000 to maybe 220000 square feet as pace for
selling the obliged goods.
1.1 Research Problem
Citing an example of every market, the component of customer service is very
fundamental. It is quite clear that majority of supermarkets are currently running customer care
program but on the same note facing the problem of the above mentioned is that the very product
is its incorporation to local outlets. The customer perceptions are always as a result of a poor
model of customer care services. Nakumatt for instance has a belief that the quality standard of
service each customer receives is equal regardless of the outlet they shop in. it is very significant
and relevant to be keen on the maintenance of nationwide consistence so that the market receives
quality services to avoid poor performance.
Location also has a very outstanding role as a retail market outlet strategy because of
enhancing the sales of a company. Nakumatt therefore faces a lot of competition bearing in mind
Nakumatt Downtown and more so Hyper because of the fact that Uchumi Supermarket in
Kimathi street besides Ngong as they are mostly known to have relatively low prices as
compared to Nakumatt thus Uchumi dominates as the preference of majority of customers. One
of the branches is affected whereby Nakumatt Junction and also Nakumatt Karen are near to
each other thus lowering the annual turnover of either of them as they serve less people. The
impact of the same is seen in a situation whereby the actual managers are de-motivated after
realizing that all their efforts are in vein.
Despite the fact that Nakumatt has been doing prettie well in their services, the challenge
that is very present is the competition from other rivals like Ukwala, Uchumi and also Tusker
mattresses alongside others. Low sales have been experienced in diverse moments because the
customers do not afford to rhyme with their prices which are considered relatively high. The
following factors maybe the actual cause of this inconvenience: poor pricing techniques, unstrategic location of the outlets, inconsistency in offering customer care services alongside
ineffectiveness in communication amongst major stakeholders of the company like the
employees, top management staff an also the customers. This is the reason why the study was
designed to find out the SCM troubles being experienced at Nakumatt Retail Stores in Kenya.
1.2 The Research Boundaries (Limitations)
1) Financial constraints were on the forefront as limiting factors in all aspects of
conducting the research such as in form of travelling expenses
2) There were at some point difficulties in the attainment of appointments in meeting the
managerial and sub-ordinate staff because of the existence of their busy work
schedule
3) The confidential nature of the respondents demanded the sixth sense in order to attain
the obliged information for the betterment of the studies validity as they thought that
the researcher was a competitor trying to find a way of attaining a zero competition
with regard to the offer of services and effect of supply chain management on
organizational performance.
1.3 Research Methods
In this section, the procedures that were used to ensure the success of the research study
are comprehensively evaluated. It entails five sub-sections which are Research design, the target
population, the sample frame and more so the sample design, the methods of data collection
alongside data analysis techniques. The commencement section which is entailed of the research
design is a package of the design study which was employed in the carrying out of the specified
research problem. It gives the relevant content that is fundamental in the study. The second level
is designed to tackle the target population and is an explanation of the respondents of the raised
questions in the study.
The participants in this context were the management stuff, employees alongside the
customers for the Nakumatt retail outlets. They filled the questionnaires in the satisfaction of
their role in the entire study. The third section totally dealt with the sample design and the
sample frame. It was a criterion for obtaining the representative sample from the entire
population to be participants of the study. The procedures that were used or incorporated to attain
the sample is explained or discussed in this section. The fourth category deals with the steps
involved in data collection and at this is the point whereby the questionnaires were developed
and then distributed to the respondents on time. The data analysis section is responsible for the
conveyance of the information to the reader and then tabulated.
Research Design
A descriptive research design was incorporated in the study in order to attain an in-depth
analysis of the problem in question. The merit present in such an approach is that there is
reliability on some sources of evidence. To this extent therefore, the complications facing the
supply chain management in the specific retail stores were the independent variables namely
pricing, location, customer care and also competition.
Target Population
The management alongside the employees was the target population of Nakumatt retail
store outlets. The customers were also put into consideration. Vivid interviews were carried out
being the people who are directly involved in the activities of supply chain to know what is
exactly required.
The following is a table showing the total population in the study conducted
Number
Rate
Managerial staff
40
20%
The Customers
60
30%
The Employees
100
50%
Total Respondents
200
100%
Explanation
The table has it that the total encompasses of the customers, employees and the
managerial stuff in the Nakumatt Retail stores. The customers were sixty in number, employees
encompassing of a hundred individuals and the managerial staff being forty.
Sample Frame alongside Sample Design
Both stratified and random sampling techniques were applied in sampling analysis. The
favorability of the approaches was as a result of the reduction of the data collection and analysis
costs by the stratification of the entire population into managerial groups. The sampling
techniques above also play a vital role in providing estimates in a separate manner of different
population parameters. It was only via these models that the Nakumatt retail store population
was attained at diverse calibers.
The table below illustrates the sample design used in the research
Section
Population
Rate
Sample Size
Customers
60
30%
18
Employees
100
50%
30
Management
40
20%
12
Sum
200
100%
60
Explanation
From the table above, the sampling design that was used is illustrated to attain
information from all the stakeholders who were the respondents beginning with the managerial
staff, employees and more so the customers of Nakumatt Retail stores. There was a random pick
of the target population without any isolation having twelve individuals from the managerial
staff, thirty representing the employees and eighteen being a sample for the customers.
Methods of Data Collection
The researcher used questionnaires to attain the information desired from different
departments of Nakumatt Retail Stores. They were then delivered on time to the relevant
participants to provide credible feedback which helped the entire process.
Questionnaire
The questionnaire entailed a number of printed questions in a well-defined order. The
respondents were asked to answer some of them which they were sure of and the others left for
more lucidity to be sought. Both the open and closed ended questions were used in the study in
collection of solicit data. The delivery was done by hand to the target participants at the
Nakumatt retail stores.
Observation
It is a scientific model of data collection in the case where it is well formulated via a
systematic plan and more so subject to validity and reliability test as a structural observation
method was used. This is because of prior unit determination of style and more so conditions.
Procedure of Data Collection
There was editing, recording, tabulating alongside analysis of data. The data
collected was then tabulated and then recorded in percentage form. The focus of the analysis was
majorly on the respondent opinions with regard to the SCM in the Nakumatt retail stores
CHAPTER TWO
2.0 THEORY
The review study is on the basis of those challenges of Supply Chain Management to the
problems of Nakumatt Retail stores in the entire Kenya. The Literature review provides the
attainment of specific documentation and forming a better analysis of the information in line
with the topic under study. The researcher is therefore provided with relevant procedures and
more so variables which back up appropriate strategies for proper investigation of the subject
matter. The review will more so entail current study areas inclusive of materials like journals,
magazines and also the internet alongside newspapers.
Empirical Studies
From definition, the supply chain encompasses all organizations that are involved via the
upstream and more so the downstream networks in diverse activities and processes which may
add value to the chain to the customers’ advantage. The rules of the chain and principles
emphasize on providing the goods and services required by the customer on time and at the right
place. The customers care less about how the goods and services should be provided but all they
want is the reception of quality products from the suppliers (Thomas & Griffin, 1996 Pg. 77-79).
Procurement is very fundamental in terms of attainment of quality service delivery to the internal
customers.
Savings are achieved in procurement via performing price reductions or be enhanced in
the price value of the items that are actually bought thus having a reduction in the supply base of
the purchased orders or payable accounts. An extra definition of a supply chain is those specific
actions that are obliged in constructing a product through the transformation of raw materials to
the finished products consumed by the final customers.
The upstream and the downstream activities affiliated with the supply chain possess an
extraction statement to the final user of the products through the transformation of raw materials
to finished goods. The integration of these particular activities with the profound objective of
attainment of a relevant competitive advantage via the improvement of the supply chain
relationships is what is referred to as Supply Chain Management (Thomas & Griffin, 1996 Pg.
20-23). It is therefore regarded to as the interconnected linkage of organizations which are
interdependent in nature and have a mutual relationship in the management of the flow of goods
from the producers to the final consumers.
The supply chain is totally concerned with the chain of activities involved in ensuring the
timely and quality delivery of desired goods to the customers on a very agreed principle. The
continuum encompasses checking those buyers and sellers willing and able to transact and
recognition is therefore given to the derived benefits from the attempt of taking strategically an
integrated supply chain perspective or view rather than the individual view focus (Thomas &
Griffin, 1996 Pg. 97-98). The managerial focus attention is the incorporation of the entire
stakeholders of the chain in question inclusive of the individual company or organization and the
constitute organization of the chain.
Theoretical Framework Review
Pricing
This is with regard to the amount payable by the customer for the goods supplied to them.
The price should actually match the perceived value and attached offers (Thomas & Griffin,
1996 Pg. 34-43). This is a very key item in any business in operation because the competitors
may take its advantage to vandalize other businesses by slightly adjusting theirs to fit the
consumers’ needs. The quality of the goods may be awesome, but due to price overcharges, the
goods may be resisted by the market. The adjustment of the prices is due to the limitation of the
folk not being in a better position to afford the prices attached to the goods by the sellers
themselves.
The price of the available competitors is also a major factor to consider in the supply
chain because the same product may be offered by the competitors at a slightly lower price and
thus the market may prefer purchasing the items at a low price in order to save for another day
(Thomas & Griffin, 1996). This may lead to the firm promoting its sales because the market will
advise their colleagues to purchase at the place they feel is lower. The competitive forces and the
complex environmental arrays which are incredible are the fundamental subjects for the price
decisions to be made.
A pricing structure is seen to be changing on a daily basis during the life cycle of the
products. Product prices are adjusted to outline the cost reflection of the buyer variations in
demand and more so situations. The companies seem to consider the duration and moments of
changing prices as the competitive environment begins to have to diversify. Stronger
relationships are established between the pricing strategies and their related aims, products
produced in terms of the model, production and distribution models responsible industry
managers and the industry sector. The discount structures are also affiliated with a business and
their systems of pricing.
There should be consideration of competitor pricing regardless of company elasticity
according to recent studies. There should be no diversity if in any case the prices of the
competitors and your prices match because of the fact that there will be no impact on the demand
in such an event (Min et-al, 2005 Pg. 17-21). Costs mark the basis of competitors marking their
product prices. The taking advantage economies of scale by firms are normally done by not
shifting the pricing patterns overtime but impose competitive prices on goods.
The price factor is a factor which determines whether an investor should enter or leave
the market with regard to the output received over a specific period of time. In avoiding
competition, there are alternative things which can be done to bring a difference. The activities
are inclusive of advertising and also product differentiation (Min et-al, 2005 Pg. 17-21). They try
to reduce the issue of direct competition which may, in turn, lead to price wars. A pricing
program should be actually constructed one their pricing objective is realized alongside the
demand elasticity. The pricing programs in question are classified into three models.
Penetration pricing is one of the models, in this particular strategy, there is the utilization
of low prices as the key basis for demand stimulation. In incorporation of these very programs,
the penetration degree of products of any given firm is increased thus increasing the market share
in return. Competitors and demand elasticity are factors favoring it. A set up of products which
have a higher rate of being complementary is done since there is the existence of cost
disadvantage. There is also the existence of competitors and more so economies of scale.
Parity pricing is another model and approach. It clearly means highly competitive as the
prices are downplayed in their role for the responsibility of market implementation as a strategy.
The inelastic nature of the market demand is a market demand favoring factor in cases whereby
the company is seen to be elastic as there is no cost advantage above the available competitors.
In line with that, the economies of scale do not avail any gains to the business (Min et-al, 2005
Pg. 26-33). The fundamental aim is the attraction of new customers under the influence of
quality and then go ahead to retain the existing customers or a large number of them.
There is also premium pricing which is strategically setting up the prices slightly above
the levels which are competitive. The higher quality differentiation approach is the determinant
factor for the success of a firm. Demand elasticity also favors this approach when there is no
excess capacity when the barriers to entry are not in existence when the economies of scale are
minor, and the pricing target is customer attraction on the basis of quality.
Competition
There is no possibility of firms operating without competition. If possible, then there are
only a few organizations which operate in such environments. The customers’ money is
scrambled for by diverse companies in a variety of ways. From a very practical perspective, the
definition of competition in a business is those particular organizations that market similar or
more so substitute goods and services in a similar locality or geographical location. Competition
dominates majority of situations and markets (Bechtel & Jayaram, 1997). It is realized that even
charities tend to compete with their opponents for financial commitment and also attention. The
emphasis of marketing is the meeting of the needs of customers and satisfaction attainment. The
uniqueness in the marketing criteria is the profound determiner of any success of a firm to avoid
product replication with each other.
The competitive advantage has an impact on the marketing managements’ arena and their
actual behavior. Marketing managers may not have total control over such factors but they may
avoid them by design if not by default so that the inevitable ones are planned for earlier.
Customer and competitor analysis should be done as a comprehension criterion of a competitive
advantage break through (Bechtel & Jayaram, 1997). The strengths and also the weaknesses of
both of the stakeholders mentioned above should be put into consideration. This creates a
difference in between the competitors because they may not be tight enough to employ the same
strategy. This is an implication that there is need to comprehend the competitors’ features and
characteristics.
The capacity utilization and more so the model of technology used determines the players
in the relative cost structure of the most instrumental players. In the cases of competitors having
a higher state of maintaining the market, there are five forces which are competitive to the threat
to the rivalry of the competitors. The forces impact to price wars, battles regarding advertising
and introducing new products, the actual threat of new entrants in the market, the growth of the
markets bargaining power alongside the growing bargaining power of the suppliers. In a
competition therefore many firms rely on pricing as the fundamental factor that determines the
level of the competitors (Thomas & Griffin, 1996). In the realization of those conditions that
really may apply, the firms try so much to respond to them or provide a counter solution to them
using very new strategies in a business arena.
An extra capacity of any firm may be sold or shrank and begin to concentrate on the
small market gap (Oliver & Webber, 1982). Consequently, if the growth of the industry is the
dominating issue, major emphasis are then imposed to the primary demand or else correct the
balance of power through the size increment over the competitors’ n the market alongside
merging with others to diversify the risks.
Explanations have taken over regarding a key competitor being a firm which is a firm
that goes after a similar target market. It may resemble another or be a substitute that meets the
needs of the customers. The executives of the existing key competitors should be comprehended
to the latter so that alongside their qualifications as a fundamental item so that professionals in
the same line of duty are consequently employed to curb them (Cooper & Ellram, 1993). The
qualifications encompass the expertise, their performance records and more so previous
companies that they have gained experience from. This practical analysis is meant to give a
suggestion of the future strategies that the competitors may incorporate in their businesses.
The source of such information may encompass the use of the business publications of
the target industry which are useful to the large firms that exist. Other useful sources that should
be used entail the customers and suppliers besides other organizational market channels. It is a
characteristic of world-class companies to study their competitors and their customers as well so
that they know how to be outstanding in delivering the best to their customers to outshine the
competitors.
The comprehensive study of the competitors requires a very substantial time so that keen
analysis is done for the betterment of sales maximization. Strategies which are cost-effective
should therefore be incorporated by the management in order to acquire the additional
information obliged (Oliver & Webber, 1982). Competition intelligence must be conducted at all
costs in the prevailing market whose environment is rapidly changing. The challenge only arises
in situations whereby assembling of the penetrating aim of the competitors’ interests becomes a
complicated scenario.
Customer Service
Customer service entails the programs and all set of activities which are undertaken by
the retailer meant to make a most convenient shopping experience and also in turn reward the
customers. The customers’ value is increased by such activities in the effectiveness of the supply
chain. Retailing seems to be a service business and all retailing components increase the
merchandising demand value of the customers. Once customers have been attended too nicely,
then they are motivated to frequently transact with such organizations.
Interpersonal Dimension
This element is encompassed of attitudes and verbal skills alongside the workers’
behaviours. Appearance is very key because it is like the first impression that the customer
experiences. The service personnel should be smart in language and the tone that they use in
delivering the services to the customers. These external characteristics convey the message even
before the personnel speaks out anything to the customer. Being attentive is also significant
because it is a way in which a customer feels recognized in a more than special way.
Tact-this is a component that is creatively done to outshine all the circumstances at
different moments to fit all situations without any error (Cooper & Ellram, 1993 Pg. 9-11).
Guidance being a level of cognitive capability and more so the resources required enhancing
service delivery and decision making efficiency should also be incorporated to increase the
organizational sales.
Personal Perspective
This is the category or perspective which actually deals with the systems of service
delivery and the procedural mechanisms of meeting the customer needs. The areas under this
section encompass time, flow, flexibility, anticipation and more so communication (Stephens,
1989). Commencing with time, it is in the sense of the duration of time taken in order to
complete the service delivery process (Houlihan, 1985). Flexibility avails the ease of offering
total satisfaction to the needs of the customers. Anticipation in this sense is the act of being one
step ahead of the customers by enhancing the provision of services without their updates.
Communication is important because of the fact that services are improved alongside
supervision through the use of an effective communication technique. Flow should be controlled
to regulate how they should receive the services without clashing with others. Each manager is
entitled to dictating the appropriate service for their store. This is inclusive of sales personnel
services and the stores’ affiliated services conveniently.
Communication alongside Advertisement
Communication is defined as ideological interchange, facts more so emotions by more
than one individual through the use of words, letters or maybe symbols if they apply in a
circumstance. Communication is very fundamental in the organizational theory because of
organizational extensiveness (Christopher, et al, 1992 Pg. 112-116). Both organizational and
administrative foundations should be built on the basis of communication. Is through
communication that all systems of any organization are linked together thus the most designed
role of the management is the ensuring of proper communication flow. Formal communication is
meant to achieve certain specific organizational objectives as informal communication applies
mostly to the colleagues working together.
The following reasons justify the importance of an efficient communication system in an
organization: Communication is responsible for the achievement of organizational objectives and
more so acting as a backup in plan formulation. It also acts as a successful change introduction
mechanism. The management is stabilized through a very profound communication strategy. It is
a vital component in the maintenance of the retail external relations. The smooth running of an
organization meets the employees’ psychological objectives and needs to boost organizational
performance.
Location
It is a reference of the competitiveness of a firm. Competition influences the quality of
goods because all the suppliers in the same line of duty are encouraged to produce the best for
sale maximization at relatively lower prices (Houlihan, 1985 Pg. 15-21). The retail managers get
an inspiration out of competition to do a better job. Similar stores which may be in place to serve
very few customers makes the retail stores to undergo some form of suffering. This element
sometimes increases the issues of customer traffic.
Retailers should not actually fears competitors but only focus on their objectives and
mission statement that will act as a blueprint in determining their merchandise right market. The
strategy of location can be done by retailer mapping in accordance to the available traffic amount
and the number of consumers in a location. The location is a very key item that is put into
consideration by most retailers because they need a free market for the disposal of their products.
The location attains the organizational strategic advantage over the competitors thus acting as a
monopoly in the market.
Critical Review
From the commencement of the literature, diverse authors and more so researchers have
argued that an organization cannot attain its peak in SCM if they do not perfect in disciplines like
pricing, enhancing communication, perfecting customer care services and strategically
examining the location of a firm or retail store. It is quite true that if organization chooses to
concentrate on the above mentioned factors in the supply chain management, then meeting the
objectives set won’t be hectic. In conclusion therefore, it is a must for these outlined factors to be
taken care of at all costs so that the improvement of the retail stores is observed in the supply
chain management to maximize sales.
Summary and the Research Niches
After the literature review, there has been establishment of the problems and
complications encountered in the SCM in the retail store outlets by coming up with diverse
solutions to curb the problems that face the Nakumatt retail stores. Taking the following issues
into account will be of greater importance to all stake holders of Nakumatt as a company.
In determining their location of a new outlet, it is important for them to be totally guided
by their mission statement for them to attain the relevant market to their merchandise. The
pricing strategies that they should employ should definitely satisfy and fit the sacrifice made by
the clients because it is elucidated to be a way in which the public perspectives the sold
merchandise. The company should be in a better position to provide auxiliary services to their
customers so that they feel the services are more than efficient.
CHAPTER THREE
3.0 RESEARCH ENVIRONMENT
Nakumatt Holdings Company was established in the year (1987) and it is the country's
superseding retailer having a total of 17 initial branches in the entire Kenya. The company holds
a wide range of valuable products in each and every branch thus meeting the suitable needs of
the economy of Kenya in an affordable way. The chain has designed stores possessing wide
aisles and attractive display units meant for convenient shopping experience, the shopping
environment is well lit with an ample parking space and more so convenient hours for opening
(Wanjiku, 2008). The chain has a dynamic team in the top management that is committed to
attaining the best output for passing accumulated benefits to consumers via offering a wide range
of products. Examples of this are smart card loyalty program, the Nakumatt voucher, among
others.
The company in question has a truly Kenyan outlook and has managed to employ more
than 4000 Kenyans as employees who facilitate their operations. It's corporate governance and
more so social investment is justified across the company and entails the directors, the
management level and staff on the front of social investment, their budget has enabled them to
change peoples’ lives on the environmental issues and work in the principle that their customers
receive affordable products and those that meet world’s quality standards. Their mission is the
creations of a chain of world class level products. They were the inventors of electronic tax
registrar and have paid Cash 800million every year. The profile of Nakumatt is composed of the
board of directors, Finance department, Human resource Management department and the
technical department.
They were considered the best in regarding the quality of standard that they have set in
the attainment of the best they can offer East African Community. The verdict is on the basis of
the world acceptable standards. They are more so divided into the company is further divided
into five departments namely finance, sales and marketing, technical, human resource and also
company secretary. The company is known to have actually three types of employees. The senior
management is on the top most rank, middle management alongside low management. The
following is the organizational structure of Nakumatt.
CHAPTER FOUR
4.0 EMPIRIA
This chapter encompasses of the collected data during the moment of conducting the
study. The analysis and interpretation is also done from the distributed questionnaires to the
target population. The objectives and the research questions were factors that provided a
blueprint with the help of the independent variables. There was distribution of sixty
questionnaires. Thirty of them were distributed to the department which deals with purchases
while twenty of them while ten of them were also taken to the stores. The total questionnaires
resulted to only sixty being received as fully completed. The table below illustrates the response
rate of the questionnaires during the study.
Department
sample
Response (Actual)
Ratio
Sales
Twenty
Ten
20.10
Purchasing
Thirty
Twenty Five
30.25
Stores
Ten
Five
10.5
Total
Sixty
Forty
60:40
Interpretation
From the total sixty respondents who represented the sample size, forty of the total were
the only ones which were received while twenty five of them emerged from the purchasing
department employees, five were from the stores department who are known to have provided
abundant information. The department dealing with sales got back 10 questionnaires.
Quantitative Analysis
Gender
Table showing rate of respondent feedback
Gender
Specific Responses
Rate
Female
15
37.5%
Male
25
62.5%
Total
40
100%
Majority of the respondents were realized to males while the females did not participate
in large numbers. The percentage of the male respondents was actually 62.5 as the females were
represented by 37.5. One can draw a rough estimate that Nakumatt is encompassed with majority
of the employees being males more than females.
The following is a graphical representation of the respondent feedback
120
100
80
60
40
20
0
Males
Females
The following is a table illustrating the age brackets of the respondents
Respondent age bracket
Number
Rate %
BR 0/18
Two
5
BR 19/30
Twenty Three
57.5
BR 31/40
Eleven
27.5
40 & Above
Four
10
SUM
Forty
100
The following is a graphical representation of the respondent age brackets
25
20
15
40 +
31-40
19-30
10
0-18
5
0
Category 1
Interpretation
The majority of the respondents were between the age brackets of 19-30 years thus
illustrates that Nakumatt has many employees at this category. The young generation from the
statistics above is employed maybe because they are strong and can perform tasks faster as
compared to the other generations.
Education Level
The following is a tabular representation of the level of education of the respondents at
the Nakumatt store retail outlets.
Level of Education
Number
Rate %
Masters
6
15
Degree
20
50
Diploma
12
30
O level
2
5
Sum
40
100
The following is a graphical representation of the level of education of the respondents at
the Nakumatt store retail outlets.
20
18
16
14
12
10
8
6
4
2
0
O level
Diploma
Degree
Masters
Degree
Diploma
Education
Levels
O level
Masters
Interpretation
Drawing facts from the analysis, the degree holders are the ones dominating the the
Nakumatt Retail stores. In percentage form, they occupy 50.3%, the diploma holders encompass
15% while 5% was a rate of the O levels in terms of academic qualification.
Service Years
The following is a tabular representation of the years of service of the respondents at the
Nakumatt store retail outlets.
Service Years
Number
Rate %
0/5 YRS
Twelve
30
6/10 YRS
Six
15
11/15 YRS
Ten
25
16 +
Twelve
30
SUM
Forty
100
The following is a graphical representation of the years of service of the respondents at
the Nakumatt store retail outlets. The following is a Graphical representation of the years of
service of the respondents at the Nakumatt store retail outlets.
12
10
8
16 + YRS
6
11-15 YRS
6-10 YRS
4
0-5 YRS
0-5 YRS
6-10 YRS
2
11-15 YRS
0
16 + YRS
Experience
Interpretation
Following the outcome of the analysis, thirty percent of the participants have five years
and below of experience in service, the range between 6-10 years is entailed in a 15% rate, 25
percent of the total respondents are seen to have at least 11-15 years in service at Nakumatt
Retail store outlets while 30% were seen to have served for more than fifteen years.
Pricing
Tabular Representation of the respondents’ data on pricing
Group
Initial Responses
Rate in %
Very Good
Eight
20
Good
Fourteen
35
Moderate
Nine
22.5
Low
Nine
22.5
Sum
forty
100
Graphical Representation of the respondents’ data on pricing
25
20
15
MODERATE
GOOD
VERY GOOD
10
5
0
Location
Interpretation
Majority of the respondents in Nakumatt view piecing as a very great challenge and
limitation in the supply chain. According to thirty five percent of the total respondents, it is quite
clear that pricing is a great challenge. More so, twenty percent of the respondents argued that it is
a very fundamental problem affecting Nakumatt Retail stores. Another 45 percent of the total
number of participants was for pricing being a moderately low factor to affect the supply chain
management of Nakumatt. Nakumatt would only experience a very extreme positive impact if it
would apply the argument of the 55% of those who felt that pricing is a challenge and try to
adjust in order to fit in the very competitive business environment.
Competition
The following is a tabular representation regarding respondents’ data on competition in
Nakumatt Retail outlets
Group
Initial Responses
Rate in %
Neo-entrants Threats
Eight
20
Substitute threats
Six
15
Competitive Rivalry
Twenty six
65
Sum
forty
100
The following is a Graphical representation regarding respondents’ data on competition
in Nakumatt Retail outlets
30
25
20
Competitive Rivalry
15
Substitutes
10
Neo-entrants
5
0
Competition
Neo-entrants
Substitutes
Competitive Rivalry
Interpretation
According to the results obtained from the study, it is quite evident that competition
within the retail stores is the most fundamental and challenging issue. There is a confirmation
from the study that the entry into the retail business is easy but competitive rivalry emerges as
substitutes begin to penetrate the market and affect the chain of Nakumatt.it is therefore upon the
company under study to incorporate new strategies in order to outstanding and outshine the
opponents.
Location
The following is a tabular representation of the location as a factor in the supply chain
management as per the arguments of the respondents at the Nakumatt store retail outlets.
Group
Initial Responses
Rate in %
Most effective
Twenty four
60
Fairly effective
Ten
25
Ineffective
Six
15
Sum
forty
100
The following is a Graphical representation of Location as a factor in the supply chain
management as per the arguments of the respondents at the Nakumatt store retail outlets
25
20
15
Ineffective
10
Fairly effective
Most effective
5
Most effective
Fairly effective
0
Location
Ineffective
The findings of the study have it that sixty percent of the respondents have a feeling of
their location being so much effective and they argue that location is a very profound factot
towards the attainment of the organizational goals and objectives in the Nakumatt retail stores.
Citing an example, twenty-five percent argued that location is relatively effective on a fair basis
as opposed to fifteen percent who were fore the argument that location does not have any impact
at all costs.
Advertisement
The following is a tabular representation of Advertisement as a factor in the supply chain
management as per the arguments of the respondents at the Nakumatt store retail outlets
Group
Initial Responses
Rate in %
Most effective
Twenty
50
Fairly effective
Ten
25
Ineffective
five
12.5
Hapless
five
12.5
Sum
forty
100
The following is a Graphical representation of Advertisement as a factor in the supply
chain management as per the arguments of the respondents at the Nakumatt store retail outlets
20
18
16
14
Hapless
12
Ineffective
10
8
Fairly effective
6
Most effective
4
Most effective
Fairly effective
Ineffective
2
0
Hapless
Advertisement
Drawing facts from the outcome of the study, there is this feeling of 75 percent of the
total number of respondents that the models of advertisement used by Nakumatt are awesome but
the opposite applied to the remnant 25 percent who were proponents of Nakumatt utilizing
relatively poor advertisement approaches in promoting their products.
Customer Service
The following is a Tabular representation of customer service as a factor in the supply
chain management as per the arguments of the respondents at the Nakumatt store retail outlets
Group
Initial Responses
Rate in %
Low
Twenty
50
Medium
fifteen
37.5
High
five
12.5
Sum
forty
100
The following is a Graphical representation of customer service as a factor in the supply
chain management as per the arguments of the respondents at the Nakumatt store retail outlets
20
15
high
10
medium
5
low
low
medium
0
customer
service
high
There was dominance of the thought that the service applied to customers has a very tight
influence on the customer turn out. The above is an argument of fifty percent of the total
respondent population. From the 37.5 percent of the respondents, it was found out that their
argument was on the basis that customer care services have a moderate impact on the supply
chain of Nakumatt Company. The remnant 12.35 percent was for the idea that customer service
only has a small influence on the success of Nakumatt’s customer turn out.
Qualitative Analysis
The insights of qualitative analysis elucidate that there was a recommendation of
respondents that Nakumatt should actually adopt strategies of price control to be very
outstanding from the competitors in the line of duty. There was also a suggestion from the
participants of the study that their prices should be on the basis of product quality and more so
service quality.
Fair pricing is also a recommendation of the participants but in cases whereby the quality
speaks for it, the customers should not be swayed by prices but also be on the lookout for the
product value.
The perfect competitors should only be allowed in to the market under some form of
structural standards to limit those who do not meet the trading threshold. The Kenya Bureau of
Standards should actually take up the responsibility and perform their price control and taxation
role to the fullest and impose very demanding policies for businesses to operate If only approved.
There should be a strategic location of a retail outlet for customers and also the
employees for the Supply Chain management enhancement. With regard to customer service
delivery, the respondents argued that they were quite fair. The slow service delivery was the only
thing that they felt was the profound cause of many problems.
Training was seen to be instrumental in assisting the sector of service delivery because of
the fact that the respondents were mixed up with some colleagues who were not well educated
thus did not have the cognitive capability to deal with customers well as desired. A clear
statement of the policies in line with service delivery was one of their indications from the
findings and a pure reinforcement tool was said to be utilised to attain the best.
Discussion of the summary
Drawing facts from the responses which were gathered, Supply Chain Management
effects on the troubles being experienced at Nakumatt Retails are caused by not giving
immediate attention to the whereabouts of the employees regarding their line of duty. It is a must
for these very measures o be dealt with without apology so that the issue of for instance, proper
channels of communication to be enhanced for the management o be reached out with ease for
improved organizational performance.
As per the unanimous agreement of the participants, the issue of customer service is
crucial in the retail store business. Following their opinion, a poor customer service strategy is
the actual source of a bad image regarding the retail outlet. It is therefore advisable for a good
customer service o be maintained or enhanced for cultivating a positive organizational image.
The study found out that the greatest complication facing the retail store outlets is competition as
a factor. The high competition in the industry is the evidence for this conclusion. It is actually
seen that each retail store is ever fighting for outplay each and every other store which is in the
competition cycle. A proper pricing model should be developed to enhance that the competition
is reduced in a tactical way.
Outcomes and Recommendations
Summary
The study in question had an objective of knowing the challenges that are cause of the
troubles faced by Nakumatt from the supply chain management. The target was attained as the
challenges were really identified to the latter. Substandard products were also identified to be
dominating the market because of the reason of selling them at an affordable price while the
standardized ones by the Bureau of standards are sold at a higher price.
Pricing is a very great challenge and limitation in the supply chain, it is quite clear that
pricing is a great challenge. It is argued that it is a very fundamental problem affecting Nakumatt
Retail stores. The only experience is that a very extreme positive impact can occur if an
organization prepares so well to apply an awesome pricing approach.
It is quite evident that competition within the retail stores is the most fundamental and
challenging issue. There is a confirmation from the study that the entry into the retail business is
easy but competitive rivalry emerges as substitutes begin to penetrate the market and affect the
chain of Nakumatt. It is therefore upon the company under study to incorporate new strategies in
order to outstanding and outshine the opponents.
Location is a very profound factor towards the attainment of the organizational goals and
objectives of any retail store. Location is very fundamental for the success of any retail store
outlet as from the findings of the study conducted at Nakumatt. Drawing facts from the outcome
of the study, if a poor location strategy is used then it is a failure oriented business.
There is a dominant fact of the thought that the service applied to customers has a very
tight influence on the customer turn out. The above is an argument of fifty percent of the total
respondent population from the study. The insights of qualitative analysis elucidate that there
was a recommendation of respondents that Nakumatt should actually adopt strategies of price
control to be very outstanding from the competitors in the line of duty confirming the fact that
service quality to customers is profound.
Fair pricing is also a recommendation of the participants but in cases whereby the quality
speaks for it, the customers should not be swayed by prices but also be on the lookout for the
product value. The perfect competitors should only be allowed in to the market under some form
of structural standards to limit those who do not meet the trading threshold. The Kenya Bureau
of Standards should actually take up the responsibility and perform their price control and
taxation role to the fullest and impose very demanding policies for businesses to operate If only
approved.
There should be a strategic location of a retail outlet for customers and also the
employees for the Supply Chain management enhancement. With regard to customer service
delivery, the respondents argued that they were quite fair. The slow service delivery was the only
thing that they felt was the profound cause of many problems.
Training is instrumental in assisting the sector of service delivery because of the fact that
the respondents were mixed up with some colleagues who were not well educated thus did not
have the cognitive capability to deal with customers well as desired. A clear statement of the
policies in line with service delivery was one of their indications from the findings and a pure
reinforcement tool was said to be utilised to attain the best.
Supply Chain Management effects on the troubles being experienced at Nakumatt Retails
are caused by not giving immediate attention to the whereabouts of the employees regarding
their line of duty. It is a must for these very measures o be dealt with without apology so that the
issue of for instance, proper channels of communication to be enhanced for the management o be
reached out with ease for improved organizational performance.
Drawing facts from the unanimous agreement of the participants, the issue of customer
service is crucial in the retail store business. A poor customer service strategy is the actual source
of a bad image regarding the retail outlet. It is therefore advisable for a good customer service o
be maintained or enhanced for cultivating a positive organizational image.
The greatest complication facing the retail store outlets is competition as a factor. The
highest competition in the industry is the evidence for this conclusion. It is actually seen that
each retail store is ever fighting for outplay each and every other store which is in the
competition cycle. A proper pricing model should be developed to enhance that the competition
is reduced in a tactical way.
Recommendations
Competition is mostly concerned with the force of other retail outlets to go out of the
arena so that there is survival for the fittest. There is a recommendation that Nakumatt should be
responsible for the factors that are the objectives of the study to achieve the highest peak results.
They should incorporate the Kenya Bureau of Standards in order to regulate the competition that
is in their line of duty because the KBS ensures that quality standards are met and thus many
enterprises may fail because of the cost. There is enhancement of fair competition with that
similar products quality.
There is a recommendation that a proper pricing model regardless of company elasticity
according to the study should be used. Costs mark the basis of competitors marking their product
prices thus the study also recommends that Nakumatt should be keen in observation of
competitor prices.
The price factor determines whether an investor should enter or leave the market with
regard to the output received. In avoiding competition, there is a recommendation of alternative
things to be done to bring a difference. The activities entail advertising and also product
differentiation as a strategy. A Pricing program should be actually constructed one their pricing
objective is realized alongside the demand elasticity. The pricing programs in question are
classified into three models. A very proper location is very key in any business operation because
of the fact that it should be done in advance before the premise set up. It is a recommendation
that Nakumatt should ensure so that an element of convenience is put into consideration for the
betterment of the customer and employee welfare and enhancement of a healthy competitions.
Advertisement is also very fundamental in a general business view because it provides a
lucid standpoint and more so platform that brings the essence of the customer versus product
know-how. The recommendation of incorporating advanced advertisement mechanisms is on the
basis of creating an elaborate awareness of existing products in a firm that the customers should
be informed about. There are increased numbers of customers in the cases where a proper
advertisement approach has been incorporated so that they become the buyers of the availed
products in any given firm.
The study goes a step ahead to recommend that an awesome customer service is
extremely significant in encouraging them to come again and again to transact and be major
stakeholders of the firm. All the inventors and innovators of any given business should be very
keen in putting into consideration this factor because it acts as an encouragement to the
customers in the boosting of sales as the study emphasizes.
Areas for further Research
The retail industry can be said to be diversified and hence there being an existence for
room for further research to be conducted on areas such as the effect of the retail firm tp the
economy or the motivational impacts of the retail outlets employees. Since pricing till on the
same note plays a very useful role in the arena of retail businesses would be very incumbent on
the supply chain management. Further research should also be conducted with relevance to the
incorporation of all country wide retail outlets meant to offer a vast perspective with regard to
the advancement of technology.
CHAPTER FIVE
5.0 CONCLUSION
The profound aim of the study was the attainment of the pricing extent on the local retail
outlets operations. Pricing was actually the most significant factor as the employed pricing model
of has a pure influence on the attraction of customers. The competitive advantage of any business
is quite influenced by a proper pricing strategy while alternative pricing techniques is not
incumbent to result to low prices. They therefore need to have a relative value to each other.
The competitors would take advantage of pricing as a criterion to vandalize other
businesses by slightly adjusting theirs to fit the consumers’ needs. The quality of the goods may
be awesome but due to price overcharges, the goods may be resisted by the market. The
adjustment of the prices is due a better position to afford the prices attached to the goods by the
sellers themselves. This may lead to the firm promoting its sales because the market will advise
their colleagues to purchase at the place they feel is lower.
The competitive forces and the complex environmental arrays which are incredible are
the fundamental subjects for the price decisions to be made. Companies seem to consider the
duration and moments of changing prices as the competitive environment begins to have
diversifying. The discount structures are also affiliated in a business and their systems of pricing
thus pricing was seen to have an influence on the operation of any business.
Another aim was to determine the effect of competition on the SCM practices. The
support and backup of the supply chain management was directly from competition. Diverse
participants argued that competition from the rivals was very tight and thus just like any other
business, Nakumatt faced it rough. The attainment of the competitive advantage of a business
over others would be as a result of the achievement of the major objectives of proper location,
pricing and more so good customer relations.
The determination of the extent of the effect of retail operations was among the
fundamental objectives. The extensive and comprehensive research conducted has it that the
location of any given business is the stand point of its success for the betterment of the customer
and employee convenience meant o outshine the competitors like no one business.
Establishment of the influence of advertisement in the supply chain regarding the
problems of Nakumatt was another key role. Advertisement brings into existence public know
how of the nature of goods and services available in a business. He details of the products are
further elucidated to enhance the knowledge of the product before purchase. A proper ool and
strategy of advertisement boosts to the peak the sales and alongside that increases the number of
customers of a certain enterprise.
The impact of the services of customer care on the SCM was besides another objective.
The customers may be permanent in a business and more so attract their families and friends if
there is a positive customer care model applied. This may apply in any retail outlet of Nakumatt
or any other company that operates in the same line of duty. Nakumatt for instance was seconded
to possess an awesome customer care service to the customers.
In line with that, communication is also a vital item in the operation of a business.
Communication has a responsibility of the achievement of organizational objectives and acting
as a backup for plan formulation. Successful change is attained as an introduction mechanism.
The management is achieving an element of stability through a very tight communication
strategy.