Analysis of Growth Strategies on Performance of Leather Industry, Kenya

Abstract

The growth of the leather industry can help Kenya become industrialized. The leather industry contributes to economic growth through employment generation. However, data from the Kenya Association of Manufacturers demonstrate that more animals are slaughtered, but we still import more leather products. Little or no value addition is made on the hides and skins, and thus insignificant exports are done. This inspired the current study that sought to examine the influence of growth strategies on performance of the leather industry in Kenya. The study was literature-based. The study results showed that mergers & acquisition strategy, penetration strategy, diversification strategy, pricing strategy and differentiation strategy have a significant impact on performance. It was revealed that government regulation has a moderating effect on the relationship between business growth strategies and performance. The development of growth strategies such as mergers & acquisition strategy, penetration strategy, diversification strategy, pricing strategy and differentiation strategy can enhance the performance of the leather industry in Kenya. Growth strategies include methods that a firm uses to achieve its goals for expansion. The growth strategies play a central role in the expansion of a firm and enables to increase market shares and develop new markets and products. Based on the findings, the study recommended that firms in the leather industry need to consider embracing the growth strategies since it was found they have an impact on performance. The growth strategies such as mergers & acquisition strategy, penetration strategy, diversification strategy, pricing strategy and differentiation strategy can be embraced. The study also recommended that the companies should open new branches in new geographical areas to reach new customers. The companies need to assess how to retain the existing customers by developing new distribution channels. The firms in the leather industry should make the prices of the products more competitive in the market. The government should develop policies and frameworks that will support the firms in the leather industry. There is a need to have subsidies, incentives and a price ceiling that will support the growth of the firms in the leather industry. Keywords: Mergers & acquisition strategy, penetration strategy, diversification strategy, pricing strategy, differentiation strategy, performance, leather industry, Kenya