Influence of Material Capability on Competitive Advantage of Sugar Companies in Western Kenya

Abstract

There is great interest by the manufacturing firms in material capability due to the multiplier benefits arising out of effective and efficient material management. The Resource based view theory states that the resources possessed by a firm are the primary determinants of its performance and Porter’s diamond theory suggests that the national material base of an organization plays an important role in shaping the extent to which it is likely to achieve advantage on a global scale. Out of 88 questionnaires sent out, 64 usable questionnaires were received giving a response rate of 73%. Descriptive statistics was used to test the objectives, chi- square test were used to test the hypotheses and correlation analysis was used to determine the direction and magnitude of the relationship between material capability and competitive advantage. The findings are that the material capability influences competitive advantage of sugar companies in Western Kenya. From the study it can be concluded that companies under study have material capability limitations resulting in a vicious circle of sugarcane glut and scarcity. The study recommends that for manufacturing firms to experience remarkable success in their performance, priority must be given to Materials Management as a total concept. Further research should be carried out on the influence of material capability on competitive advantage of the private owned sugar companies in Kenya.