Influence of Supply Chain Diversification on the Performance of Large Food and Beverage Processing Companies in Nairobi City County, Kenya

Abstract

The performance of food and beverage manufacturing companies has become a pressing concern due to the rising incidence of supply chain disruptions, which pose significant threats to achieving operational goals. This study investigates the influence of supply chain diversification on the performance of large food and beverage processing companies in Nairobi City County. Supply chain disruptions have been linked to severe financial repercussions, including lower stock returns and increased failure rates, necessitating innovative management strategies. Utilizing a quantitative correlational research design, the study surveyed all 46 major food and beverage companies in the region, targeting procurement, financial, operations, and supply chain managers. Data collection was conducted via questionnaires, achieving an impressive response rate of 81%, underscoring the representativeness of the findings. Statistical analysis revealed a strong positive correlation between supply chain diversification and organizational performance, with an R-squared value of 0.650, indicating that approximately 65% of performance variability could be attributed to diversification practices. Regression analysis confirmed that each unit increase in diversification significantly enhanced performance metrics. These results align with existing literature, emphasizing the need for proactive diversification strategies to mitigate risks and enhance operational efficiency. Recommendations include continuous investment in diversifying supplier bases, adopting advanced technologies such as artificial intelligence, and implementing regular training programs for staff. Furthermore, strategic partnerships with suppliers and routine assessments of risk management policies are vital for maintaining competitive advantages. This research highlights the critical role of supply chain diversification in enhancing performance in the food and beverage sector, providing insights that are essential for navigating the complexities of modern supply chains. Future research should explore comparative studies across different sectors, longitudinal impacts of diversification, and qualitative insights from industry leaders to further enrich understanding in this area. By addressing these recommendations and research avenues, food and beverage manufacturing companies can enhance their resilience and ensure sustained performance in an ever-evolving market landscape..