Turnaround Strategies and Performance of Dairy Companies in Kenya: Case of New Kenya Cooperative Cremeries Limited

Abstract

This study sought to establish the effects of turnaround strategies on performance of New Kenya Cooperative Creameries. Specifically, the study sought to assess the effect of financial restructuring strategy, reorganization strategy, repositioning strategy and market redefinition strategy on performance of New Kenya Co-operative Creameries.  The study was anchored on Verifier Determinant Theory, Stage Theory of Successful Turnaround and The Market-Based View (MBV) Theory. The study adopted a descriptive research design. The target population for this study was 150 employees of New Kenya Cooperative Creameries at their head office. The sample size of the study was 108 employees. The study used stratified random sampling in selection of 108 employees. Data was collected using questionnaire. Questionnaires were administered to the respondents by the researcher. Questionnaires were pretested and validated using pilot study. Analysis of quantitative data was done using descriptive statistics using SPSS (Version, 23) and presentation was by use of percentages, means, standard deviations and frequencies. Qualitative data that was collected using open ended questions was tested using content analysis. Correlation analysis was done to determine the level of association between predictor and response variables. Multiple regressions were done to investigate the effects of turnaround strategies on performance of New Kenya Cooperative Creameries. The study found that financial restructuring strategy had a positive relationship with performance of the Dairy Companies in Kenya; reorganization strategy had a positive relationship with performance of the Dairy Companies in Kenya; repositioning strategy had a positive relationship with performance of the Dairy Companies in Kenya; and market redefinition strategy had a positive relationship with performance of the Dairy Companies in Kenya. the study recommends dairy companies in Kenya to adopt the financial restructuring strategies such as restructuring company debt into a single loan this will enable the management of the company to plan for the future growth of the business; the company should also have equity finance on board his will ensure that they have internal source of finance; the company should also ensure that they have equity financing as this will enable the management to have a breathing space by ensuring they do not have fixed obligation of paying dividends; the company should also consider mergers because they broaden the financing option of the company and provide more capital than simply relying on existing cash.