Organizational Mergers and Sustainable Competitive Advantage of Almasi Beverages Limited, Kenya

Abstract

In recent times, sustainable competitive advantage has become a common phenomenon worldwide. Organizations have been forced to adopt sustainable competitive advantage as a crucial strategic tool to deal with the ever-increasing global market competition. In many companies, mergers are strategic growth plans which not only helps them stay in competition but also extends their dominance, market share and margins in the global setting. Mergers facilitate firms’ fast growth and a capital market discipline mechanism improving efficient management and profit maximization. The goal of the study was to evaluate how the Kenyan beverage industry sustainable competitive advantage was affected by mergers. Specifically, the study sought to investigate the effect of economies of scale, diversification and also synergy on sustainable competitive advantage of Almasi Beverages Limited in Kenya. The study was underpinned on the following theories; the theory of efficiency, the resource-based view theory, and the hubris theory. The research utilized the descriptive research design. Secondary and primary data was utilized. Primary data was collected using a questionnaire. Blank responses were not included when analyzing the data. Descriptive statistical methods such as mean, frequency, percentages were used for analysis. Research findings were presented through graphs charts and tables. Findings revealed that revealed that Almasi Beverages sustainable competitive advantage was positively and significantly influenced by economies of scale, by diversification, and by synergy. The study concluded that economies of scale led to the firm enjoying large discounts and cheaper more affordable prices, improved capital equipment and production processes, and having quality managers working in various departments. Diversification led the firm to have a wide range of products on their product line, new designs within the organization that were aesthetically designed and were more superior in branding, and new products offerings in the organization contributed to sustainable competitive advantage. Synergy led the firm to have a stronger bargaining power for inputs, stronger bargaining position for cost of capital, and ensuring that the organization was running efficiently and in an effective manner, expediency of the logistics team in terms of their speed and responsiveness, and financial independence would all enhance the organizations sustainable competitive advantage. The study recommends that the organization should adopt a culture of continuous improvement around product improvement through innovation to ensure that it gives the firm sustained competitive advantage in the long run. In order to remain different from competitors, Almasi Beverages should focus on high product quality, fast delivery, design and new products, and unique product features. To achieve this, the study recommends that the firm should embrace differentiation as the key competitive strategy and set sufficient resources. Further, positive competitive advantage should be attained by more beverage firms in Kenya through their firm consolidation via the merger strategy.