CHALLENGES FACING THE IMPLEMENTATION OF DIFFERENTIATION
STRATEGY IN THE OPERATIONS OF THE MUMIAS SUGAR COMPANY
LIMITED
Awino Zachary Bolo, PhD.
School of Business - University of Nairobi
Nairobi-Kenya
Email: zstra2009@gmail.com
Robert Wamalwa Wandera
Africa Nazarene University
Nairobi-Kenya
Email:rwwelimu@gmail.com
Isaiah Imaita, Ph. D
Africa Nazarene University
Nairobi- Kenya
Peter K’ Obonyo, Ph.D
School of Business - University of Nairobi
Nairobi- Kenya
ABSTRACT
Many organizations today are focusing on becoming more competitive, by launching
competitive strategies that give them an edge over others. To do this, they need to craft
differentiation strategies (Micheal, E. Porter 1985). However, most sugar firms have not been
able to formulate strategies required to gain competitive advantage. This calls for a strategic
fit of an organization’s core competence levels, technology, leadership styles, markets,
culture, people, and environmental influences, which is an emerging paradigm in the study of
strategic thinking.
This paper focuses on the challenges facing the implementation of differentiation strategies in
the operations of Mumias sugar company in Kenya.
KEY WORDS:
Competitive advantage, Differential advantage, Core Competencies, Strategy,
Operations
1
INTRODUCTION
In this paper we examine the challenges facing the implementation of differentiation
strategies in sugar industry, which includes core competence levels, technology, leadership
styles, markets, culture, people, and environmental influences among other study variables.
Formulation of differentiation strategies, we recognize that this is a strategy for making a
firm’s products more competitive, in such a competitive market. This involves making a
product slightly different from other similar products, by varying certain features. Studies
have shown that such attributes will make consumers to perceive it to have properties, which
make it distinct from rival products or services. Differentiation recognizes that customers are
too numerous and widely scattered, with heterogeneous needs and adequate spending power,
for them all to prefer the same product or service will move products from competing based
primarily on price to competing on non-price factors, or promotional variables. If customers
value a firm's offer, they will be less sensitive to aspects of competing offers; whereby price
may not be one of these aspects.
The objective of differentiation is to develop a position that potential customers see as
unique based on a certain features that satisfy that class of customers. Differentiation strategy
practices in the Kenyan sugar industry are limited. However, there can be an application of
the concept of generic strategies using product reputation building to capture more markets
(Edward Chamberline and Joan Robinson, 1996).
In this study we look at strategic management from an economist and management
perspective, as the ability to perform better than competitors when core competencies,
technology, leadership styles, markets, culture, people, and environmental influences are
matched in the sugar industry. The main concern is whether Mumias Sugar Company limited
is utilizing these variables to produce a differentiated sugar, in an environment where such
variables are not known and cannot be predicted with accuracy.
2
Kotler and Keller (2006), define product differentiation (also known simply as
"differentiation") as the process of distinguishing the differences of a product or offering from
others, to make it more attractive to a particular target market. Jay argues that the major
sources of product differentiation are: (i) Differences in quality which are usually
accompanied by differences in price, (ii) Differences in functional features or design, (iii)
Ignorance of buyers regarding the essential characteristics and qualities of goods they are
purchasing, (iv) Sales promotion activities of sellers and in particular advertising, (v)
Differences in availability (e.g. timing and location), and (vi) Reputation (Barney B. Jay,
2006). A successful product differentiation strategy will move products from competing based
primarily on price to competing on non-price factors, or promotional variables (Wendy
Robinson, 1997). Scholars further argue that, if customers value a firm's offer, they will be
less sensitive to aspects of competing offers; whereby price may not be one of these aspects.
The objective of differentiation is to develop a position that potential customers see as unique
based on a certain features that satisfy that class of customers. Differentiation strategy
practices in the Kenyan sugar industry are limited.
Sugar is produced globally and takes the form of white granules produced from
sugarcane and sugar beet. Sugar is a widely traded basic commodity in the world, thus if the
sugar sector is well managed, it can bring enormous returns to both developed and developing
countries (Kenya Sugar Board, 2004). However, as a result of competition, competitive
differentiation strategies must be crafted for sugar industry’s competitiveness. Herbert K.
Tay, (2003), asserts that, in some motor industries the price of vehicles has decreased due to
the declining real cost of goods. Competitiveness has forced automakers to cut costs and pass
savings to consumers. This margin shrinkage is as a result of information transparency.
Internet services are offering competitive retail prices, dealer invoices, rebates, financing and
online buying services. All this actions have enhanced consumer purchasing power.
3
CONCEPTUAL DEVELOPMENT
The literature on differentiation strategies relates to: Core competence, Technology,
Leadership styles, Markets, Culture, People, and Environment. We have reviewed the
literature in line with the schematic diagram based on perfect competition and varying some
features of the Sugar market and making it appear differentiated as shown below.
M
C
P
A
T
C
P
e
A
T
C
D
M
R
0
Q
e
Q
Figure 1.0. Chamberline and Robinson; theory models on product differentiation and
performance: The analysis of monopolistic competition. 1
Price
firm
MC
P=MR=DD
Pe
0
Q
Quantity
Figure 2.0. Model on perfect competition market structure and firm performance
in the long run.
1
Chamberline and Robinson, Theory Models on Product Differentiation and Firm Performance: The
Analysis Of Monopolistic Competition, as adapted by B. J Barney, Gaining and sustaining Competitive
Advantage, 2nd ed. (New Delhi: Prentice Hall, 2006), 322.
4
This study viewed a market as consisting of buyers and sellers. The buyer determines
the products to be availed for sale on markets and firms strive to satisfy these varying
insatiable demands. The interplay of demand and supply is a function of tastes and
preferences which every manufacturer aims to win. The purpose of any business is to make as
many sales as possible. Competition has been cited as a source of creativity. This has made
other players to vary their product lines to gain competitive advantage. Chamberline and Joan
Robinson (1996), examined product differentiation and firm performance in relation to perfect
competition by varying one of the features of the market structure of selling differentiated
products. Under perfect competition, it is assumed that there are numerous firms in an
industry each controlling a small proportion of the market (Campbell R. McConnell, 1998).
The products or services sold by these firms are assumed to be identical. According to
Chamberline and Robinson theory, firms face a horizontal demand curve(DD) (because they
have no control over the price (p) of the product they sell) and they maximize their economic
performance by producing and selling output at a point where Marginal Revenue (MR) is
equal to Marginal Cost (MR=MC). Chamberline and Robinson argue that the maximum
economic performance that a firm can achieve in a perfectly competitive market structure,
assuming no cost differences across, is normal economic profit. When firms sell differentiated
products, they gain some ability to adjust their prices. Firms can sell their output at very high
prices and produce relatively smaller amount of output, or it can sell its output at very low
prices and produce relatively greater amounts of output. Firms selling differentiated products
face a downward sloping demand curve, rather than the horizontal demand curve for firms in
a perfectly competitive market structure (See figures 1.1 and 1.2 respectively on page 17).
Differentiation theory states that the ability of a firm to maintain its competitive
advantage depends on how it manipulates other variables, in line on variety and immutability
5
of its organizational strengths and weaknesses. It adds that the concept of strategic
management and product differentiation gives a firm, the background under which strategy
can be understood and implemented. Knowledge of economics and strategy helps to predict
the factors that provide a challenge to formulation of differential strategies an idea not fully
addressed by Chamberline and Robinson. However, this theory is valuable to this study.
Independent Variables
Dependent variables
Core competence
Technology
Leadership styles
Performance through efficiency
and effectiveness in sales
Markets
Culture
People
Environment
Figure 3.0. Modified Brickley and others synergistic theory For Strategic planning
Organizational architectural theory states that business value can be enhanced only when
management transforms business models by use of core competence, technology, marketing,
and environment ( Brickley Smith et al., 2004) This theory posits that, the strategic apex
should have a good understanding of their firm’s internal resources and capabilities before
they adopt their strategies. The study modifies Organizational Architectural theory to create
synergy among variables that determine differentiation strategies in MSCL. Besides the core
competence, the study adds leadership and culture as key missing variables.
The environment poses a big threat and opportunity to the industry by opening up of new
markets and competitors. Strategists aver that firms should have the inside to outside
6
approach, whereby strategies are realigned towards making of goods and services that
cultivate their own niche in the market and format structures that sustain those markets.
Management should modify the culture within the firm to accommodate new changes. This
can be done by bringing on board new brains and cultivate the culture of delegation through
management by objectives (MBO). This enhances team spirit and accountability among
workers. Markets are points of exit for the firm’s products, and through measures like
advertising, new markets are opened. Leadership should restructure their organizations and
empower their followers through motivation to create effective teams.
The core competence married to Brickley and others theory includes skills, branding,
production, and technology that is efficient. According to Lucey, (2005) “Organizations are
seen as complex social systems that interact with the environment and respond to numerous
interdependent variables to produce high productivity”. In this regard the study used modified
Brickley and others theory to create synergy among valuables
Differentiation Strategy Background
Differentiation is a business strategy where firms attempt to gain competitive
advantage by increasing the perceived value of their products or services relative to the
perceived value of other firm’s products or services (Genessa M. Fratto et al, 2006). Thus,
other firms can either be that firm’s rivals or firms that provide substitute products or services.
For example, Rolex attempts to differentiate its watches from Timex watches by
manufacturing them in solid gold cases. Also Mercedes attempts to differentiate its cars from
Hyundai’s cars through sophisticated engineering and high performance. Differentiation falls
into two broad categories: conceptual distinctions and empirical research (Michael Porter et
al, 1991).
The concept of differentiation focuses on firms making products that appear different
from their competitors. This is in order to make them earn a competitive advantage over
7
others. According to porter and others, differential advantage is created when a firms products
or services differ from its competitors and are seen as better than a competitors products by
customers. All these strategies come along with the concept of creating efficiency within an
industry. Porter and others further acknowledges that as a result of globalization, the best
indicator of a company’s future success is the ability to be different from its peers. This
therefore implies that sugar companies must adopt differential strategies like change the
nature of the product, through varying features such as the use varying colorations to make it
more attractive on the market. The value added by the uniqueness of the product may allow
the firm to charge a premium price for it. Because of the product's unique attributes, if
suppliers increase their prices the firm may be able to pass along the costs to its customers
who cannot find substitute products easily.
Thompson and others (2004) aver that successful differentiation has three aspects:
command a premium price for its product, increase sales because of additional buyers are won
over by the differentiating features and gain buyer loyalty to its brand. A product is
differentiated if consumers perceive it to have properties, which make it distinct from rival
products or services, and ideally unique in some particular way and difficult to emulate
(Murphy, 2007) Hence competitors will distinguish their brand, product or service in some
way, perhaps by size, quality or style, to give it greater appeal for certain customers.
Differentiation recognizes that customers are too numerous and widely scattered, and with
heterogeneous needs and adequate spending power, for them all to prefer the same product or
service ( Martin Hingley et al, 2008).
A successful product differentiation strategy will move a product from competing
based primarily on price to competing on non-price factors, or promotional variables (Thomas
G. Calderon and Emeka Ofobike, 2008). If customers value the firm's offer, they will be less
sensitive to aspects of competing offers; thus price may not be one of these aspects (Roberto
8
Luna-Arocas and Joaquin Camps, 2008).The differentiation strategy is effectively
implemented when the business provides unique or superior value to the customer through
product quality, features, or after-sale support and service (Obasi Akan et al, 2006). Firms
following a differentiation strategy can charge a higher price for their products based on the
product characteristics, the delivery system, the quality of service, or the distribution channels
(Thomas L. Powers and William Hahn, 2004).
The quality may be real or perceived, based on fashion, brand name, or image. The
differentiation strategy appeals to a sophisticated or knowledgeable consumers interested in a
unique quality product or service and willing to pay a higher price for these non-standardized
products. Customers value the differentiated products more than they value low costs.
Organizational performance in companies with the differentiation strategy is based on:
(i) Innovation in marketing technology and methods; (ii) Fostering innovation and creativity;
and (iii) Focus on building high market share. For example, Land Rover Ltd, a differentiated,
upscale SUV manufacturer, used its database marketing system to identify 4,000 Range Rover
owners meeting a particular profile. Rover invited the selected owners to a special marketing
event and sold 1,000 new Land Rovers priced on average, at $52,000 each. Thus the
innovation in marketing methods further supported and enhanced their differentiation
strategy.
The study agrees that it is eight to ten times more expensive to find new customers
than it is to market to existing ones. Differentiation strategies practices in the sugar industry
are limited. Nevertheless, we can apply the differentiation focus strategy of generic strategies
and craft in means of maintaining reputation in capturing more markets. Sugar is a widely
traded basic commodity in the world; which implies that, if the sector is well managed, it can
bring numerous returns to any country. However as a result of competition, competitive
9
differentiation strategies must be crafted for Sugar industry’s competitiveness (Herbert K Tay,
2003).
It is further argued that the price of an auto has decreased due to the declining real cost
of goods. Competitiveness has forced automakers to take out costs and pass saving on to
consumers, thus making margins to shrink due to information transparency. The Internet sites
are offering competitive retail prices, dealer invoices, rebates, financing and online buying
services. This has enhanced the consumer purchasing power.
The challenge posted here is that, “whenever we have any Sugar imports into this
country, local Sugar Companies will strive for state protection”. This may be an indication of
inadequate innovation by local sugar companies. This is costly for the country in terms of
denial of import taxes and on quality of sugar products produced locally. Akan and others
aver that differentiation can be successful if tailored to: (i).Extensive training of marketing
personnel, providing outstanding customer service, providing speciality products and,
services, developing a broad range of new products or services, (ii).Developing brand
identification and extensive training of front-line personnel, (iii). Targeting a specific market
(iv) Innovation in marketing (v) Technology and methods (vi) Utilizing advertising (vii)
Building a positive relationship within the industry for technological leadership ( Akan et al.,
).
Core Competence
These are capabilities that can be extended across different products and markets.
Hamel (1994) as explained by Thompson and others posit that most firms have competence,
but what is needed, is to identify them and decide on how best to leverage them against
opportunities. For example, Sony Corporation developed the competency in manufacturing
miniature radios, which has made them to become the best electronic manufacturers. They
produce products or services for high price market segments.
10
The Cadillac Division of General Motors, for instance is differentiating the brand to
appeal to China’s elite high-flying entrepreneurs, the only market segment that can afford
Cadillac’s hefty $63,000 price tag by making it different from German brands like Mercedes
and BMW. There is need to position the brand as something different and very bold (N. G.
Madden).
Technology
Once an organization has acquired competence in making a certain product, it can
maximize productivity by procuring the latest and modern technology. Ohmae (1985)
describes Japan as unforgiving economy, where thousands of corporations are destroyed (go
out of business) every year as a result of failing to invest in new technological innovation (J.
Teresko). People determine ultimately whether or not competitive advantage is created and
sustained. This depends on the human resource practices adopted within the organization.
People are able to create and implement strategies in a supportive culture. It is not a marketing
practice to identify and interact with very precise target markets. Traditionally, marketers
who gain processing efficiencies, create databases, and perform various forms of customer
analysis have used technology (Michelle Lane Heine et al, 2003). Marketing automation is the
next logical step, because it helps one to do something with that insight (C. Bailor, 2005).
Leadership Styles
Leadership is the process of persuasion, where an individual induces a group to pursue
certain objectives. One aspect of effective leadership involves restructuring organizational
architecture in a manner that motivates employees with the relevant knowledge to initiate
value-enhancing proposals. Jay argues that differentiation is an expression of creativity of
individuals and groups within firms and is limited only to opportunities that exist, or that can
be created, in a particular industry and ability of firms to creatively explore ways to take
advantage of those opportunities (Barney B. Jay). This ability can only be achieved if we
11
have an enabling leadership that empowers their followers to go for exemptions on aspects
such as being visionary and a team player in all that takes place (J. Dubrin Andrew, 2001).
Drucker captures an environmental scanning analysis that depicts leadership as that,
which should manage the fundamentals like people, inflation among others (Peter Drucker,
1994). Strategic leadership should ensure that values and culture within an organization are
appropriate for satisfying key success factors. This should lead to environmental-valueresources (E-V-R) congruence. John Kao, Chief Executive Officer (CEO) of the Idea Factory,
a consulting organization (J. Flower, 1999), says that a number of firms have come to him
asking how do design an innovation engine and capability. He recommended the following (i)
Develop cross-functional teams; (ii) Explore factors outside the firm’s usual perspective e.g.
customer attitudes, new technologies, industry trends. The differentiation strategy appeals to a
sophisticated or knowledgeable consumer interested in a unique quality product or service and
willing to pay a higher price for these non-standardized products (J. Flower, 1999).
Marketing
Organizations need to acquire markets that provide more avenues for more sales
through various forms of promotion and distribution. This is the department that acts as a
window for the firm and should be strategic in capturing all important information that can be
fed back on tastes and preferences of various customers. For example, Pizza Hut, a
differentiator that continually innovates with new products to keep customer’s interest, builds
and managers customer relationships. From customer orders, Pizza Hut has competitive
intelligence that predicts trends and behavior to better manage targeted direct mail campaigns.
The company claims to have the largest fast-food customer data warehouse in the world with
almost 50 percent of the US market and some 40 million households included. (J. Pizza
Brown, 2003).The key to using the tactic of leveraging a diverse workforce to build market
12
share goes beyond simply hiring people of color. It also encompasses inviting minorities to do
business with them as opposed to waiting until they simply discover you.
Culture
Culture refers to a shared meaning, shared understanding and shared sense making.
The value any organization places on role models, through the system of complements, and
coupled with employee expectations has a big impact on developing the morale of workers.
Mullins says that culture impacts on most aspects of organizational life, such as how decisions
are made, who makes them, how rewards are distributed, who is promoted, how people are
treated and how organization responds to environmental changes ( G. Morgan, 1998).
Microsoft developed a culture of hiring creative, hardworking individuals. Gerald says that
management systems should be developed that which motivates employees from top to
bottom to pursue growth oriented, innovation focused competitive strategies (Cole A. Gerald,
2004). Relationship marketing theory can be used to explain these phenomena (R.M. Morgan
and S.D Hunt, 1994).One reason why workforce diversity leads to increased sales and profits
is because buyers are better able to bond with salespeople that share their cultural values.
Environment
Michael porter says that firms can take variety of actions to influence these
perceptions (Michael Porter's, 1985). He further alludes that 5 forces of competition that
emanates from the environment determine competition in the market. As a result of these
forces, the concept of differentiation was curved out to bring more prosperity in markets.
Chamberline and Robinson coined in organizational competences, personnel, leadership,
finances, to bring out a differentiated product that can be more competitive to make them gain
more competitive advantage (Chamberline and Robinson). They argue that a well-established
13
organization, with well trained and motivated personnel can be able to initiate strategies that
can effectively be sustained. The driving forces manifest this concept, which may be from
suppliers (Harvey, Maylor, 2007) .Gerald, acknowledges that the key strategic organizational
driving variables are people, tasks, technology, culture, external environment and
organizational goals.
METHODOLOGY
Research Design
This study employs a positivist philosophical orientation. The positivists tend to
assume that a single, objective reality exists independent of what individuals perceive; they
share the fundamental belief that the material word of tangible objects does not exist
unperceived. They place a high priority on identifying casual linkages between and amongst
variables. The positivists views involves:- (a) the observation of real world facts or
phenomena,(b) the formulation of explanations for such facts or phenomena using inductive
processes, (c) the generation of predictions about real world phenomena using the previously
formulated explanations and deductive processes.(d) the attempted verification of these
predictions through systematic, controlled experimentation or observation. In view of the
philosophical orientation which we have adopted for this study, we used the case study
method to obtain the empirical data to determine the challenges.
Target Population
The target population for the study is all departments within Mumias Sugar Company
Limited (MSCL). MSCL has eight departments namely: Finance, Agriculture, Human
Resource, Information Technology, Sales and Marketing, Projects and Business
Development, Factory Operations and Internal Audit with population estimate of 300
permanent workers.
14
Sample Frame
The study purposively selected the following departments from accessible population:
Human Resource, Sales and Marketing, and Factory Operations. These Departments play a
crucial role in the differentiation strategy implementation. Human Resource procures skilled
personnel for the organization, Sales and Marketing promotes products to customers, where as
Factory Operations produces products for the market.
The study was undertaken at MSCL because it is the biggest sugar miller in Kenya
that has shown progress by listing at the Nairobi Stock Exchange. Structured, unstructured
questions and interview were used.
Sample
The study selected ten respondents from each of the following department: Human Resource,
Sales and Marketing, and Factory Operations. The respondents were Middle Managers and
Heads of Departments. The study purposively selected a total of thirty (30) managers from all
these crucial departments that deal with crafting of strategies. The selected departments had
300 permanent employees and because this population size was large, 30 participants was
representative.
Data Collection Method
The study used primary data obtained through questionnaires with selected managers and
technicians in human resource, Sales and marketing and Factory operations departments.
The questionnaires were piloted by a pre-testing the level of understanding of questionnaires
was done by staff from KESREF. The questionnaires were distributed by a field assistant to
the respondents. Each department had its own format of questions in part II particularly
question 8 and 12, but were all related to the research topic. This is because departments face
different challenges and use different strategies to differentiate their functions. Part I was to
identify the general information about the respondent. Semi- structured interview schedule
15
was the main tool used for data collection. Part II was to explore the differentiation strategies
in the sugar industry and the challenges encountered.
RESULTS
This was done basing on the two research objectives
Objective One: To find out the differentiation strategies used by the sugar industry
The study shows that few differentiation strategies are carried out in Mumias Sugar
Company Limited. They are; Different packaging styles in special branded bags and sachets
with company logo, and milling of brown and white sugars. These strategies can very easily
be imitated by other manufacturers, and thus MSCL will only succeed if it invests in activities
that will build company product reputation and strategize on how to sustain that reputation.
Departments
Sales & Marketing
Human Resource
Factory Operations
Yes
5
6
8
No
0
0
0
Unknown
1
1
1
Total
19
0
3
Table 1.0. Rate of departmental differentiation of their products
The inference made here is that majority of the company staffs acknowledge that
MSCL differentiates its products. The products are differentiated using Packaging in special
branded bags with company logo, and milling of Brown and White sugars.
The study indicates that there is a deficit for more avenues of differentiation, which if
nurtured can bring competitiveness in the industry. The inability by majority of management
staff to identify and define differentiation is a clear indication of inadequate knowledge on
differentiation strategies. The study recommends that sugar needs to be branded with vitamins
D and B which are crucial to human diet. Mixing sugar with palm oil to produce diet sugar
can be a source of differentiation. The study therefore recommends that the company should
use organizational competence to build product reputation and also forge for new avenues
such as the manufacture of gasoline from molasses to cushion against escalating costs..
16
Objective Two: To establish the challenges faced by the sugar industry in Kenya in
implementing differentiation strategies.
CHALLENGES OF
NO CHALLENGES
NEUTRAL
SOMEHOW
MUCH
DIFFERENTIATION
VERY
MUCH
Core Competence Challenges
Training
1
2
4
8
6
Skills
4
2
5
5
5
Leadership
2
4
6
5
4
Technology
4
8
5
2
2
Design
1
5
4
4
7
Branding
2
1
1
8
9
Pricing
1
1
2
9
8
Research
2
1
2
7
9
Personnel
3
2
5
6
5
Finance
2
3
3
8
5
People
1
2
5
6
7
Culture
1
2
5
5
8
Governmental
1
1
6
8
5
Societal
1
2
4
9
5
International Standards
2
1
4
6
8
Competition
1
1
3
6
10
Resource Challenges
Environmental Challenges
Table 2.0. Showing challenges faced by departments in initiating differentiation strategies
The results reveal that besides the above listed challenges, others are, core
competence, such as training, skills, leadership, Technology, Design, Branding, Pricing and
Research. Others include resource-based which consists of personnel, finance, and People.
Moreover, environmental challenges such as culture, governmental, societal,
compliance with international standards and stiff Competition from other low cost sugar
producers. Besides the above-mentioned challenges, the respondents added piracy of
company packaging materials and packing with substandard sugar that demeans the
17
company’s product reputation. The study recommends that in order to overcome challenges
related to core competence it needs to strengthen training programmes, employ, evaluate the
skills required to produce a competitive product cheaply, and leadership need to empower
employees to go for exemplary innovations.
The study recommends that in order to overcome challenges associated with resources
such as personnel the Company needs to procure high skilled and creative human resource.
Also, the study recommends that challenges related to finances need to be dealt with by
involving partners such as World Bank and ISO to aid in financing operations. Indeed
challenges related with the Environment can be sorted out by producing sugar in compliance
with international standards such as Kenya Bureau of Standards (KEBS) and other
international regulators such as those set by ISO.
The study also found out that there are other challenges, which include inadequate
interdepartmental communication. The study therefore recommends that regular staff
meetings need to be put in place. Regular staff Meetings enhances team work and creativity.
DISCUSSION AND CONCLUSIONS
In this section a summary of the findings of the study are provided, discussed and
conclusions drawn.
Summary and Conclusions
This part provides a summary and conclusions on the findings as follows:
(i) The study recommends that sugar needs to be branded with vitamins D and B which are
crucial to human diet. Mixing sugar with palm oil to produce diet sugar improves on product
value. Also, more brands of differentiated sugar should to be produced and patented for
company’s future competitive growth, (ii) The study recommends that the company need to
use organizational competence to build product reputation and also forge for new avenues
such as the manufacture of gasoline from molasses to cushion against escalating costs., (iii)
18
The study recommends that organization architectural strategy should to be linked to all
departments in order to add value to the final products and all this will create synergy. (iv)
The study recommends that Mumias Sugar Company Limited should to adopt online
procurement by creating a website where clients can place orders. This will increase product
market base and will thus be an efficient point for delivering inquiries by customers, (v) The
study recommends that the Company need to use other organizational strengths to streamline
Scientific Research as this the key to initiation of differentiation strategies. (vi) The study
recommends that the Company’s management should to utilize differentiation of sugar
products as a competitive framework over other competitors, (vii) The study recommends
that to overcome challenges related to core competence, there is need to strengthen training
programmes, employ and evaluate the skills required to produce a competitive product
Leadership should empower employees to go for exemplary innovations, (viii) The study
recommends that challenges related to finances needs to be dealt with by involving partners
such as World Bank and ISO to aid in financing operations. Also the Company needs to
release some of the Company’s share to the public through Stock Exchange to get more
funding, (ix) The study recommends that since market variables change from time to time
core competences should be harnessed to bring out competitive advantage to the Mumias
Sugar Company Limited. In addition to improve differentiation process in MSCL, the study
recommends the following measures to be put in place: use of latest technology, continuous
advertisements and invest more resources in researching for other new product uses, (x) The
study recommends that more brands of differentiated sugar needs to be produced and patented
for company’s growth, and (xi) The study recommends that in order to overcome challenges
associated with resources such as personnel the Company needs to procure high skilled and
creative Human Resource. The study found out that there are other challenges, which include
inadequate interdepartmental communication towards crafting of strategies. The study
19
therefore recommends that regular interdepartmental staff meetings need to be put in place.
This enhances team work and creativity
20
Acknowledgements
We wish to acknowledge the support of Munias Sugar Company and its managing director Dr
Evans Kidero, the Africa Nazarene University and the University of Nairobi for providing the
necessary technical assistance towards this research, and everybody else who gave us both
moral and financial support to complete this work. We recognize your full participation
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