INFLUENCE OF TURNAROUND STRATEGIES ON FINANCIAL PERFORMANCE: A CASE OF NEW KENYA CO-OPERATIVE CREAMERIES

Hadija Wako

College of Human Resource and Development,

Jomo Kenyatta University of Agriculture and Technology

P. O. Box 62000, 00200 Nairobi, Kenya

Corresponding Author email: This e-mail address is being protected from spambots. You need JavaScript enabled to view it

Dr. Allan Kihara

College of Human Resource and Development,

Jomo Kenyatta University of Agriculture and Technology

P. O. Box 62000, 00200 Nairobi, Kenya

CITATION: Wako, H. & Kihara, A. (2017). Influence of Turnaround Strategies On Financial Performance: A Case of New Kenya Co-Operative Creameries. International Journal of Economics and Finance. Vol. 6 (12) pp 1 -19.

ABSTRACT

This study sought to establish the influence of turnaround strategies on firm performance: A case of New Kenya Co-operative Creameries. The study specifically focused on reinvigoration of firm leadership strategy, cost management strategy, financial restructuring strategy and focus on the core activities strategy. The study adopted Theory of Change, Transaction Cost Theory, Static Trade-Off Theory and Porter’s Competitive Advantage Theory to explain the relationship between study variables. This study adopted a descriptive survey design since a descriptive survey design is intended to find out what people currently believe in and the situation at the moment. The target population comprised all the 134 employees in the management position at New Kenya Co-operative Creameries Company Limited. The study used both primary and secondary data. Correlation and regression analysis was used for analysis. The study findings indicated that reinvigoration of firm leadership strategy, focus on core activities, cost management strategy and financial restructuring strategy positively affects financial performance of organization. Therefore the study recommended that in order for the New KCC to improve its financial performance, there is need to restructure its top management team to improve management efficiency, review the TMT’s tenure to spur commitment as well as review the firm’s TMT to reduce redundancy as a robust and structured mechanism to track progress throughout the year. The study also recommended that there is need for the firm to focus on determining the markets, products and customers that have the potential to generate the greatest profits, focus on product lines for which the firm is best known, focus on customer segments that are particularly loyal or less price sensitive, close loss making operations and develop a clear competitive strategy in its chosen core act to improve its financial performance.

Key Words: Reinvigoration of firm leadership strategy, Focus on Core activities Strategy, Cost management strategy, financial restructuring strategy, financial

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