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Omosa Motongwa Henry - School of Business and Economics, Kisii University, Kenya

Dr. James Muya, PhD - School of Business and Economics, Kisii University, Kenya

Dr. Stella Omari, PhD - School of Business and Economics, Kisii University, Kenya

Dr. Charles Momanyi, PhD - School of Business and Economics, Kisii University, Kenya


Tea factories especially those managed by Kenya Tea Development Agency are faced with challenges of implementing business growth strategies. This has resulted to poor performance leading to public outcry. The study sought to determine the effect of product diversification strategy and performance of selected tea factories in Kenya. This study was anchored on the Ansoff Matrix theory and supported by Resource Based View, Market Based View and Agency theories. A descriptive research design was adopted and used in this study. KTDA has seven regions comprising of 69 factories with 1506 management staff. This study purposively selected Kisii and Kericho Highlands regions. The population of this study was 701 with a sample size of 364obtained using Yamane’s (1967) formula. Simple random sampling was used to get specific respondents. A self-constructed questionnaire was used to collect data from respondents. A pilot study was conducted at Kagwe and Theta Tea Factories in Aberdare Ranges region to test reliability of the data collection instruments. Cronbach’s Alpha coefficient was used to test reliability which had an overall coefficient of 0.903. The study tested face validity through peer reviews and content validity by opinions of research expert and supervisors. Data analysis was done using descriptive statistics, which included mean, standard deviation, percentages and frequencies. Inferential statistics, that is Pearson correlation was used to determine strengths of relationship while simple linear regression was used to estimate relationship between variables. The analyzed data was presented using tables, charts and graphs. Study findings indicated that product diversification strategy have positive effect on firm’s performance. The study concluded that tea factories employ business growth strategies to enhance firm performance. The study also concluded that tea factories employ product diversification to increase their competitive advantage over other firms and create products that appeal to customers.

Full Length Research (PDF Format)