INFLUENCE OF COMPETITIVE STRATEGIES ON PERFORMANCE OF AGRICULTURAL COOPERATIVE SOCIETIES IN HOMA BAY COUNTY, KENYA

Abstract

Although the agricultural cooperative subsector was essential to Kenya's economic expansion, recent reports showed a worrying downturn in its performance, with its share of the GDP declining. Homa Bay County agricultural cooperatives still had difficulty streamlining their operations, even with large government investments in infrastructure to enhance market access and logistics. The main cause of these difficulties was the poor application of competitive strategies, which resulted in negative organizational outcomes like low profitability, dwindling membership, and lower farmer incomes.By analyzing the influence of three crucial competitive strategies, namely cost leadership, differentiation, and focus, on the performance of agricultural cooperatives, this study aimed to address these problems. The study focused on three specific objectives: first, to evaluate the cost leadership strategy on the organizational performance of agricultural cooperatives; second, to assess how differentiation strategy influenced the performance of agricultural cooperatives; and third, to analyze the influence of focus strategy on the organizational performance of agricultural cooperatives in Homa Bay County, Kenya. The region's cooperatives continued to perform poorly despite government assistance, which impeded the expansion of the agricultural industry. The purpose of this study was to determine the effectiveness of these strategies' implementation as well as their impact on overall success, operational effectiveness, and financial viability. The study used a correlational study design and a census survey sampling technique. The study employed Porter's Five Forces of Competition and the Resource-Based View theories. A total of 543 respondents, including chairpersons or directors, managers or chief executives, and cooperative officers from 181 cooperatives, completed questionnaires to provide data. Descriptive statistics (mean, median, and standard deviation) and weighted average frequency analysis using SPSS were used to examine the gathered data. The relationship between cooperative performance and competitive strategies was evaluated in this analysis. In order to improve the performance of agricultural cooperatives in Homa Bay County and support the long-term expansion of Kenya's agricultural industry, the findings provided insightful information to stakeholders, cooperative leaders, and policymakers. The study established that competitive strategic practices, including cost leadership, differentiation, and focus strategies, significantly influenced the organizational performance of agricultural cooperatives in Homa Bay County. Cost leadership, driven by cost reduction, financial controls, and farmer engagement, contributed to improved profitability, member satisfaction, and growth, although gaps in technology adoption remained a challenge.