An Analysis of the Effect of Scope of Strategies and Brand Portfolio on the Relationship between Strategic Change and Performance of Firms in the Alcohol Industry, Kenya

Abstract

This paper examined the effect of scope of strategies and brand portfolio on performance of firms in the alcohol industry in Kenya. Previous studies dwelt on effect of limited aspects of scope of scopes such as marketing leaving out critical aspects like financial, distribution and cost control strategies. The study was anchored on the Resource-Based Theory (RBT). The study adopted correlational research design. The population was 25 local firms registered by Kenya Revenue Authority by 2012 and approved by National Authority for the Campaign Against Alcohol and Drug Abuse, (NACADA) by 2015. A saturated sample consisted of 100 respondents to get primary data. Descriptive statistics and regression analysis were used to determine the relationship between scope of strategies and organizational performance. Content validity was achieved by subjecting a pool of questions underlying dimensions of scope of strategies to six experts. Cronbach`s Alpha reliability coefficient was .881 implying a good indicator of internal consistency. Results revealed R<sup>2</sup> of 0.510 to scope of strategies (p<.001) implying that scope of strategies account for 51% of performance. Regression results show scope of strategies B=0.461, p=0.000 and brand portfolio B=0.677, p=0.000 implying one standard deviation in scope of strategies and brand portfolio will result in a change of 0.461 and 0.677 standard units of performance respectively. TheΔR<sup>2</sup>after incorporating interaction effect wasΔR<sup>2</sup>=.024, p=0.024 implying the moderating effect of firm characteristics of brand portfolio improve performance by 2.4%. Study concludes: scope of strategies is significant in performance and brand portfolio as one of the aspects of firm characteristics moderate the relationship between strategic change aspect of scope of strategies and performance. Study recommends: management to focus more on scope of strategies and brand portfolio for transformed performance. The study is helpful to management to appreciate the significance of a firm`s scope of strategies and firm characteristics of brand portfolio to performance. Further research that captures different concepts of strategic change on performance in different sectors should be carried out.