AN ASSESSMENT OF FACTORS AFFECTING PROCUREMENT STRATEGY ON

THE PERFORMANCE OF MANUFACTURING FIRMS IN KENYA CASE OF

COCACOLA KISII BRANCH

THOMSON DIVINAH NYACHAMA

A RESEARCH PROJECT SUBMITTED TO SCHOOL OF BUSINESS AND

ECONOMICS IN PARTIAL FULFILLMENT OF THE REQUIREMENT OF A WARD

OF DIPLOMA OF PROCUREMENT OF SCHOOL BUSINESS AND ECONOMICS

KISII UNIVERSITY

NOVEMBER, 2017

DECLARATION AND RECOMMENDATION

DECLARATION

The research project is my original work and has not been presented to any other institution/ university for the award of diploma.

Signature------------------------ Date-----------------

THOMSON DIVINAH NYACHAMA

CB05/10177/16

RECOMMENDATION

This research project has been submitted for examination with approval as the university supervisor.

SIGNATURE------------------------- DATE.........................

Mr. Wycliffe Otera

Assistant Lecturer school of business and economics

Kisii University

ii

DEDICATION

To my parents thanks for your love and tireless support has added a value to my life. My friends thank them for touching my life in a positive way, to my entire supervisor Mr. Wycliffe Otera for his support in my academic work.

iii

ACKNOWLEDGEMENT

I acknowledge almighty God and my supervisors Mr. Wycliffe Otera for his assistance in this

research project preparation and I appreciate throughout the research project.

iv

ABSTRACT

The recent global procurement trends show that a company can only purchase in the market ifit adopts procurement strategies effectively. Procurement strategy is the approach used by theorganization to fix modernization of the purchasing operations. It acts as a tool used toevaluate the firm’s performance in the business change. The procurement strategies to beused procurement strategies was negotiation strategy, order strategy and technologicalprocurement strategy, companies which have applied the procurement strategies haveprospered fully in procurement performance unlike those which have not. The study objectsto; find out the effects of negotiation strategy, to determine the effects of Purchase orderstrategy on procurement performance and to establish the effects of technological strategy onperformance. The area of the study is coca cola kisii branch in Kisii town. The targetpopulation of the study includes all 520 employees whereby which 52 employee was used asthe sample size in the study. Purposive sampling techniques were used to choose people withinformation. Data was collected by use of closed end questionnaires by drop and pick methodand administered by the researcher. Validity was verified by researcher’s supervisors andreliability of the instrument was verified by test retest coefficients. Data collected wasanalyzed by descriptive statistics such as percentage and frequencies and the findings werepresented by use of tables and figures. The respondent were asked to indicate relevantinformation that relates to Purchase order strategy in procurement decision in your firm bylevel of agreement and found that Creation of new product or qualitative improvement inexisting product were highly strongly agreed and Application of new industrial process wasfollowed by Development of new material sources or other new inputs. The findings showthat application of new industrial process and new forms of industrial procurement steps wasstrongly used. The study findings show and recommended that most of the respondents wereto increase new supplier market openings and development of new material sources or othernew inputs. The study should be used to assess the extent to which technological procurementstrategy decision affect performance. The study show that service delivery and timelines wasstrongly used as performance indicators. The study suggested that the study to be conductedon the effect of technological procurement power on performance. The study also suggestedfor development of the procurement decision and technological procurement is developed byprocurement and were adopted with procurement program team is composed together verywell company power drive.

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TABLE OF CONTENTS

Contents

DECLARATION AND RECOMMENDATION.......................................................................ii

DEDICATION.............................................................................................................................iii

ACKNOWLEDGEMENT...........................................................................................................iv

ABSTRACT..................................................................................................................................v

TABLE OF CONTENTS.............................................................................................................vi

LIST OF TABLES.......................................................................................................................ix

LIST OF FIGURES......................................................................................................................x

List of Abbreviations...................................................................................................................xi

CHAPTER ONE.........................................................................................................................1

INTRODUCTION.......................................................................................................................1

1.1 Background of the Study......................................................................................................1

1.2. Statement of the Problem....................................................................................................2

1.3 Objective of the Study..........................................................................................................2

1.4 Research Questions..............................................................................................................3

1.5 Significance of the Study.....................................................................................................3

1.6 Scope of the Study...............................................................................................................3

1.7 Limitation of the Study........................................................................................................3

1.8 Assumptions of the Study.....................................................................................................4

1.9 Operational Definitions of the Study...................................................................................4

CHAPTER ONE.........................................................................................................................5

LITERATURE REVIEW...........................................................................................................5

2.1 The Concept of procurement................................................................................................5

2.2 Theoretical Framework........................................................................................................5

2.2.1 Expectancy Theory............................................................................................................5

2.2.2 Roger’s Theory..................................................................................................................6

vi

2.2.3 Productivity Theory...........................................................................................................6

2.3 Empirical Literature.............................................................................................................7

2.3.1 Negotiation Planning Strategy..........................................................................................7

2.3.2 Purchase order strategy.....................................................................................................8

2.2.3 Technological Strategy....................................................................................................10

2. 3 Knowledge gap..................................................................................................................11

2.4 Conceptual Framework......................................................................................................12

CHAPTER THREE..................................................................................................................13

RESEARCH METHODLOGY...............................................................................................13

3.1 Research Design.................................................................................................................13

3.2 Study Area..........................................................................................................................13

3.3 Target population................................................................................................................13

3.4 Sampling Techniques and Sample Size..............................................................................13

3.5 Data Collection Instruments...............................................................................................14

3.5.1 Reliability of the instruments..........................................................................................14

3.5.2 Validity of Instruments....................................................................................................14

3.6 Data Collection Procedures................................................................................................14

3.7 Data Analysis Techniques..................................................................................................14

CHAPTER FOUR.....................................................................................................................15

DATA ANALYSIS AND PRESENTATION............................................................................15

4.1 The Response Rate.............................................................................................................15

4.2 Demographic Characteristics.............................................................................................15

4. 2.1 Level of education..........................................................................................................15

4.2.2 Title in the firm................................................................................................................16

4.3 Purchase Order Strategy.....................................................................................................16

4.4 Technological Procurement Strategy................................................................................18

4.5 Performance.......................................................................................................................19

vii

CHAPTER FIVE......................................................................................................................20

SUMMARY, CONCLUSIONS AND RECOMMENDATIONS...........................................20

5.1 Summary............................................................................................................................20

5.2 Conclusions........................................................................................................................20

5.3 Recommendations..............................................................................................................20

5.4 Areas of future study..........................................................................................................20

References...................................................................................................................................21

Appendices..................................................................................................................................23

Appendix I: Questionnaire......................................................................................................23

viii

LIST OF TABLES

Table 4.1: Response Rate

Table 4.2 Level of Education

Table 4.3 title in the firm

Table 4.4 purchase order

Table 4.5 Negotiation Planning Strategy

Table 4.6 Technological strategy

Table 4.7 performance

ix

LIST OF FIGURES

page

Figure1 Conceptual Framework………………………………………………………13

x

LIST OF ABBREVIATIONS

IS Procurement strategies

ID procurement decision

xi

CHAPTER ONE

INTRODUCTION

1.1 Background of the Study

Procurement strategy requires procurement of getting new purchasing ideas about the service

to be offered in the firm procurement of material in relations to change of technology.

Procurement strategy is an approach of modernizing procurement ideas on overall

performance, for procurement growth and that of workers at all the business changes.

Procurement strategy is the action of new tools to improve benefit from increasing

procurement due product modification and developing negotiation planning selling and

technological strategies to look new purchasing of product in the market in order to improve

firm’s performance, for procurement to survive and firms must grow it more quickly than the

competitors do eventually than business ideas (David, 2015), changing previous

technological procurement techniques to the new form of technological procurement in the

modernization way to the instrument of procurement, organization goals and objectives to

operating managers in the factory. Strategic procurement is a procurement dimension along

with strategic procurement systems. It assists the organization to solve issues effective

managerial performance measurement, the rise of intangible assets and the challenge of

implementing strategy to procurement performance (Caracell, 2006).

In Mexico strategic managers must plan significant contest of procurement strategy in

international standards of specifications for effective and efficient modernism of

procurement. Strategy procurement is a decision which is developed through market research

to break barriers to international trade. Strategic procurement idea has operated for centuries

in different parts of the world for example that of China, One of the earliest days and longest

serving purchasing strategies organization providing strategic purchasing idea slowly to

become a widespread tradition of about all over Ireland in less than one decade. The main

purpose procurement tactic is to improve new purchasing ideas with interest for short periods,

experimenting with ideologies of economics ( Sirkin 2007). In Malaysian companies

procurement strategy is declining due to the rapid economic growth in which generated

higher profitable business opportunities in Malaysia. procurement managers have helped to

reduce poverty levels among the poor communities by training purchaser similarly , Andew

and (Sirkin 2007) in his study on Grameen Bank’s clients in Banglandesh noted that about

1

90% of clean revealed improvement of the procurement strategy. The study also was

conducted the procurement in Bonsinia and Heregovina indicated significant positive impact

on household, business investment, business registration and post war transition (Molleman,

2007).

1.2. Statement of the Problem

Coca Cola Company limited is a manufacturing industry which is competing with difficulties

in other firms of procurement strategy in terms of its negotiation planning selling and

technological strategies in product available in the manufacturing sector is in dilemma,

because of stiff competition in procurement strategy in the target market. This leaves coca

cola companies a challenge to operate in Kisii town with no option other than entering into

procurement strategy as an alternative way to improve the firms performance. In order to stay

in the market there is need for procurement strategy in terms of negotiations planning strategy

and technological strategy.

Johnesn (2011) did a study on the effects of performance institutions on procurement

systems and the study did not talk of procurement strategy on procurement so this study is

anticipated adoption of procurement strategies to facilitate the technological procurement

strategies. However the procurement strategy is ineffective after several trials to introduce it

in the department proved unsuccessful. Based on the procurement technology gaps of the

procurement don’t encourage collaboration and information sharing in the manufacturing

firms as a consistence tools for technological procurement. In this study the researcher will

assess the effects of procurement strategies on performance of manufacturing firms.

1.3 Objective of the Study

The study was to assess the effects procurement strategies on performance in Kenya using a

case study of Coca-Cola in Kisii branch. In the study, the researcher focused the following

specific objectives of the study was to

i. To examine the effect of negotiation strategies on performance of Coca-Cola

companyii. To find out the effects of purchasing order strategies on performance of Coca-Cola

company.iii. To establish the effects of technological strategy on performance of Coca-Cola

company

2

1.4 Research Questions

i. What is the consequence of negotiation strategies on performance of Coca-Cola

company ii. What are the effects of order strategies on performance of Coca-Cola companyiii. What are the effects of technological strategy on performance of Coca-Cola

company

1.5 Significance of the Study

The researcher hopes that the study finding was used in the following ways; the researcher

hopes to generate new knowledge to management of procurement officers and a government

policy on performance was of benefit performance in making decisions. The findings of the

study was used by firms in other private sectors and public sectors like in banks and

education sectors of Kenya for research and firms clients in making decision regarding new

procurement policies. At the same time, researcher found as a source of information to further

study.

1.6 Scope of the Study

This study was conducted in Coca-Cola in Kisii branch and it is located in Kisii County. It

targeted the section heads in the firms and other sections within the firm and assess the

influence of procurement strategies on performance. The researcher focused on the effects of

the procurement strategies in Coca-Cola Kisii branch, because there are other numerous firms

in the area was to focus on. The study used questionnaire to collect data from the field for

analysis purposes, however, it was on the perception of the researcher which is that there are

still gaps in the research so far done. This study was therefore; tried to establish the linkage

between procurement strategy and performance.

1.7 Limitation of the Study

The study was carried out in Kisii bottler and generalization of the findings was not truly

reflecting the actual problem in the firms because of the uniqueness of each firms since they

are in different geographical locations. The other limitations are that of this topic which is

only restricted to on procurement strategies on manufacturing company in which the

researcher was have to adhere to the time schedule and minimize on the cost through control.

3

1.8 Assumptions of the Study

The researcher was conducting an intensive study to come up with findings which can easily

be generalized to other areas. The researcher was to work across the time schedule to reduce

the cost and time over run.

1.9 Operational Definitions of the Study

Procurement purchasing practices

Procurement Strategies-- the use of ability to improve method of purchasing in relations to

procurement

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CHAPTER ONE

LITERATURE REVIEW

2.1 The Concept of procurement

Procurement is a way to put new ideas on procuring goods used for determining positive

performance and new changes. Strategically new is on new actions put in an extensively way

which regarded as the sources of sustainable competitive gain in an ever more changing

situation, because it leads to product and process of improvement which makes advances that

helps firms to survive, allows firms to grow more quickly, be more efficient, and ultimately

be gainful than non-innovators, (Jiill Jusko, 2009).

According to Norton (1999) described procurements as procurement strategy by use of

balanced score card to activate procurement strategy was to act as a systematic an attempt to

measure the relationship between procurement activities of an organization and performance

to communicate the organization’s goals and objectives to operating managers. From the

findings of the study he concluded that the strategic procurement may be regarded as both a

performance measurement and management of supply and purchase. However, the theory is

used to explain procurement strategy is few. This study will seek to explain the concepts of

procurements in relations to procurement performance. The theory is adopted explain the

need for procurement strategy on procurement performance.

2.2 Theoretical Framework

2.2.1 Expectancy Theory

It was proposed by Vroom in 1964, and it is based on the assumption that every organization

expects good rewards in the future. Individuals try to work hard to performance and to show

the way towards rewards. This theory is used is this study to recognize the relationship

between procurement ideas and procurement performance and derived rewards in the

organization. Under expectancy, individual’s view is to put awareness on a particular

achievement to generate good results. Under instrumentality, individual’s beliefs are to the

efficient of performance rewards. Under valence its whereby an individual’s believes to offer

attractive rewards. These issues are jointly related to create motivating influence which

will inspire an entity to put more effort to achieve high level of financial performance, in

addition to achievements of rewards at the end of activity (Misati, 2010), It entails that work

5

performance follows efficient buying and selling services awarded fairly than on the other

way round. It is accompanied through development of financial performance, where the

organization management strategies have been put down on emphasis.

2.2.2 Roger’s Theory

It was proposed by Rogers in 1995. It is applied in airline organization as a strategy of

supply chain management. These theories require purchase strategy to be reinvented in the

organization to continue processes. The active dynamic to the firm is to adopt change of

endeavoring for excellence of performance with strong improvement of the company.

Organization strategy is very important for every organization to overcome rival competitive

in the present economic needs. Manufacturing firms have become very competitive in nature

of permanence. Rogers developed this theory as diffusion model of the organizations

strategies in different activities. The acknowledged that technology is changing and it can

lead to five types of determinant of comprise of 1st type of the determinant is put on the center

of attention to perceived quality of the company’s strategic plans, it focuses on the simplicity

of the comparative advantage, the 2nd type of determinant is set on the effects of organization

strategies adopted which clear the firm’s attributes by management techniques. 3 rd type of the

determinant is to aim at communication control, it tells the function of management strategies

(Kwamboka, 2014).

2.2.3 Productivity Theory

This is how the productivity of the day is arrived in the organization. The procurement

strategies relate to employees turn out which suggests that technological procurement control

to the amount of strategies which give out to the firm depending on the existing process and

available security or substitute for security of work done. Consumers will make buying

strategic decision to buy or not to depending on the type of brand that has been obtainable to

them by a firm. If consumer spends cost at high rates, they attract riskier saving alternatives

to security provides avenue of defaulting paying from repaying since their relationship with

the user is not as strong when security is involved. The strategies of portion theory suggest

that price rate is very significant in determining the quantity of bottlers that will be willing to

produce and determine the ability to pay the procurement strategies (Rubera, 2012).

Johnsen (2001) regards the procurement to some extent as an extended model of management

by objectives (MBO). He asserts that long term monetary performance generically attributed

6

to increased consumers loyalty and further more argue that the promotion of the procurement

is the use of style which is not reasonable on any technical grounds. The procurement

strategy in the ability of the company to articulate the mission which is associated in

procurement strategies as a major challenge in implementing the balanced strategy of

procurement, further more procurement strategy highlights out that any firm may face

challenges regarding the adoption of procurement strategy on procurement performance

( Schalm 2007).

2.3 Empirical Literature

2.3.1 Negotiation Planning Strategy

Negotiation Planning involves setting new standards of procurement price negotiations skills

to be adopted in various institutions as a purchasing strategy. Martin (2014) in his a study on

the effects of the effectiveness of planning procurement on emerging economy, the main

objectives of the study was to determine the effects of procurement performance on

procurement processes. The study referred as to as planning for procurement as a practical

tool based on the internal business knowledge and external skills on procurement in the

number of dimension critical to sustainable business and profitable needs thoughts. Planning

is the centre of converting ideas into money. The specific objectives were to solve the

problem of management changes and optimization of business procurement efforts. The study

assessed Cobb Douglas technological procurement function on various procurements. The

study revealed that there is a strong disparity is in terms of planning procurement spending.

The findings suggested that positive effects of business procurement are connected with

different business producing units. The force for procurement should be practical with goals

oriented for business achievement, Bruces Hererson the founder of Boston consulting group

about thirty years ago he argued that the majority of new product are of cash traps and will

take up more cash over their life span than they will produce. Transformation of ideas

certainly has non cash benefit including brand development and organization strength but for

most companies the proof is in the revenue profit margin and competitive advantages that

procurement creates over time, put ideas to the test with a three page scored on expected

revenue, technical feasibility, and relevance to the brand and market trends. This helps to

ensure that new products have the capability to be successful with revenue and performance

as the final measure (Niven 2003).

7

Schumpeter (2014) in his study concluded that purchasing procedures follows strategy with

the intention of change in business model. Although procurement planning assumptions that

underpin procurement theory are highly suspect it is still widely accepted that the normative

objectives of procurement management is the maximization of shareholders wealth. Strategic

financial management that was there to satisfy this procurement as a point of companionship

requires a long term course of action in which procurement strategy fits in. the function of

procurement strategy act as the area of managerial policy that determines the venture and

procurement strategy decision which are preconditions for shareholder wealth maximization.

Each kind of decision can be subdivided into two types long term strategic and short term

operational. The previous may be unique typically involving significant fixed assets

expenditure, but uncertain future gains (Sapieza, 2008).

In set multiplicity of procurement planning ideas it tend to be reappearance of infinitely needs

for funds may be get by a hand on little. Asking price and income are usually quantifiable

form accessible data and selection of a large amount of profitable firms in the absolute terms.

The planning strategy assists industry to classify new controls to the attainment of

performance. In procurement strategic decision need implosion of the global free market

depository system throughout worldwide rehired consideration of the assumption that

underscores modern procurement strategic theories Rick 199). Kester 2009) concentrate on

the empirical studies from Asian countries also scrutinize the link between technological

procurement of product booms assets price cycles and procurement crisis across the East

Asian countries. They go back to the research on the data analysis on technological

procurement booms against assets prices and procurement crisis to strategic decisions. The

study found that there is a strong relationship between technological procurement planning

and assets price changes. They stated that there is planning growth expectation, heavily

capital inflows, inadequate corporation’s dominations and reliance on interdiction by under

regulated banks all led to rapid strategic growth especially in the business are larger, the

supply is more and the market is therefore more defective. Therefore need for procurement

strategy on performance.

2.3.2 Purchase order strategy

Purchase order strategy involves the methods of ordering products from different sourrces to

meet consumer needs. Management is looking ways on how to increase order for successful

procurement strategy. Harvard (2008), studied the effects of selling mix objective of what

8

customer needs in order to sell to them. Purchase order strategy tell what consumers needs

better than competitors do builds sustainable. Achieving consumer centric procurement is not

an innate outcome of tactical results but is with time. A study published in business report had

completed that even companies spend more time on procurement ideas for both consumer’s

improvement and market capitalization. They go on to explain how consumer centric

procurement to put effort to the people who are in front line with consumers. Most

manufacturers adopt traditional product development but procurement lead to new

technological procurement methods control market niche. Procurement centric starts with

selling of infrequent goods and services in unusual (Oliver 2008).

The study done by Oliver (2007) showed that order on consumer in the concept of product co

creation and enabling consumer’s confidence. The objective was consistent with both

procurement orders and skills. Through, specific objective was to analyze the effects of new

market design models to pleasure consumer’s fidelity in form of competitive improvement in

advanced margins. The findings of the study showed that procurement strategy improves

market centric on new product efforts by ensuring consumer success, in order to use these

companies improve product differentiation in consumer experience at the centre of the

procurement, but the study did not solve the problem of procurement in the Purchase order

strategy (Cisco 2007).

Hayes (2005) studied the effects of ordering in procurement in business decision but based on

a basic business models to achieve goals of the firm, especially procurement action on

business transaction. The data analysis adopted statistical inferences and the findings are of

new ideas for strategic decision. The conclusion indicated that there is no single individual to

control all phases of ordering in procurement. The incompatible functional responsibilities of

initiating procurement process are the custody of assets which should be the responsibility of

separate individuals. Strategic duties are considered to be incompatible if a single person can

carry out and control errors and or irregularities in the course of performing day to day

activities. Recommendation was assignment of duties should provide a cross check of

responsibilities to avoid incompatibilities of procurement. Lack of proper strategic decision

of duties may result in procurement criticism if it creates a material weakness in the strategic

decision. Of this study there is no solution of procurement strategies in manufacturing firms

material weakness is one in which significant errors or irregularities may occur and not be

detected timely by employees in the normal course of performing their assigned function.

9

Kester (1999) argued that procurement strategy is depends on selling performance in which

the specific objective is as part of the consumer monitoring actively of a firm and the

efficiency with which the unit of the organization are performing their assigned procurement

functions. Recommendation lead to the strategic decision which is an independent specific

objectives were declaration and consulting action procurement to add value and advance an

organization‘s new operations and draws the conclusions that state that an organization has to

achieve its objectives by brings a regular restricted new approach to asses and get the

effectiveness of technological procurement management risk control and control process.

Whittington management is normally concerned in formative whether a department has a

clear understanding of its consumers task, is sufficiently staffed maintains good work and

cooperate cordially with consumers to other department of procurement normally reports to

the top management of which they did not talk of related research problem solution in Kenya

manufacturing firms which is revealed Rosenbusch, (2011).

2.2.3 Technological Strategy

Technological strategy is the process of adopting technological techniques of purchasing

technology is used so to inform and to attract suppliers. It is the reaction of the corporate

strategy which depends on the company strength in decision which affects technological

procurement criteria. It has impacted all purchasing operations function and other divisional

areas of the business. Even though the approach of information and completion are

inextricable linked of both are different. The strength of the company is A is procurement of

everything in strategy formation which is positioning of forces earlier than the exploit and

bills strategy implementation of management forces. Poor performances depend on the

company technological procurement strategy which is blamed for a number of strategies of

failure. Depending on the company plan those put into practice of procurement strategy will

probably be a much more diverse set of people than those who formulate it. Studies of Sikrin

(2007) on the effects on technological procurement divisions in practical section effort with

their member manage budget and procedures for the procurement technological procurement

strategy.

A study carried out by Rick (2010) indicated that there is a relationship between price

technological procurement strategy and performance, because the objective of the study was

to examine online pricing management in relations to technological procurement process in

strategic improvement sustainability. The results from the study revealed that the

10

procurement technological quotations methods affect outreach strategic market rise in the

period of one year on the average by 29%. It identified that reach the poor technological

procurement in terms of sales their reach to the needy particularly to women is limited up to

38%. From the procurement sustainability, it finds purchasing as strategy in an procurement

operational and sustainable as it measured by return on asset and return on equity and the

industry‘s performance is improving profit over time. The study also established that

procurement decision to the procurement (Andrew 2007).

Another empirical online procurement is seen from banking procurement looked at bank size

strategy and additional look at the bank procurement structure in Asian proceeding to the

procurement crisis of 1997. The study found out that during procurement decision making in

technological procurement ratio increased the level of risk. They also found that some

countries such as Indosia ,Korea and Thailand apply the strategy, also in banks shows a

strong lending performance but weaker productivity ratios which may have led to the

procurement disaster. The study also observed that bank size matters technological

procurement by profits preferences with the technological procurement size and capital

adequacy to decrease loss (the world Bank 2010). Another study was done by (Molleman

2005) on whether there is a relationship between the Asian procurement management crisis

and weakness of other decisions in current market technological procurement level in the

Asian procurement crisis.

Wanja (2011) argued by his study on the effects of technological procurement management in

business assets in sugar companies in Kenya and the findings from the study reveals that the

spread of procurement management affects the technological procurement in commercial

banks by increasing the cost of lending strategy charged on the technological procurement as

a strategy. When the cost of loans is high there are high chances of purchases and a like hood

of heaving a huge non performing loans portfolio this apply in strategic decisions when in

strategic decision when do borrowing from procurement decisions. There is no further

revealed information on procurement strategy on strategic decision in Kenya on performance.

2. 3 Knowledge gap

Most studies (David, 2015, Caracell, 2006), Andew and (Sirkin 2007) have been reviewed

but most of them have concentrated other sections of procurements strategies in management

leaving, selling, planning strategy and technological procurement strategy in procurement

performance with unclear findings and this creates knowledge gap from various scholars

11

which point out that the meaning of procurement strategies has a positive outcome to the

company’s survivals and competitiveness, However Rick (2005) did a study of principle

effecting strategic management of a company. The used regression analysis to arrive at the

findings he proposed in a form of how the procedures of procurement strategies the take

place in the association including all the factors and steps that have to be taken in

consideration by buyer oriented companies .

2.4 Conceptual Framework

The framework focuses on independent and dependent variables which affect procurement

performance of the company.

Independent variable Depended Variable

Intervening variables

Figure 2.1 Conceptual framework

Researcher (2017)

12

Purchasing Order strategy;

Order from organizations Procurement Performance

Sale volume output efficiency

Negotiation Planning Strategy; set of new purchasing process

new works Development

policy

Technological strategy;

Online quotations/ pricing

CHAPTER THREE

RESEARCH METHODLOGY

3.1 Research Design

The researcher design adopted a descriptive study because it was used to explain the situation

as it is in the present. For this study the research design was to enable the researcher to

identify the procurement strategy that the procurement department is putting into practice to

ensure proper purchase of the resources (Mugenda 2003).

3.2 Study Area

The study was conducted in Coca Cola Company Kisii branch in Kisii town, because it has

procurement sections which apply various strategic processes of acquisitions.

3.3 Target population

The target population of the study included all 520 employees comprising managers and

subordinates of Coca Cola kisii branch in Kisii town.

Table 3.1 Target Population

Category Total

Managers 40

Subordinates 480

Total 520

Source; Human resources records (2017)

3.4 Sampling Techniques and Sample Size

A sample is a set of data collected and selected from a population by a defined procedure this is

according to (Mugeda and Mugeda 2003) 10% and 30% was used in sampling to select the sample

size of 52 employees by section under study as in table 3.2. A purposive method was applied and

these gave each associate of the population an opportunity of being included in the ideas.

13

Table 3.2 Sample Size

Category Total

Managers 4

Subordinates 48

Total 52

Researcher (2017)

3.5 Data Collection Instruments

The main research instruments were research questionnaires. Data was collected by the use of

research questionnaire which was administered by the researcher by drop and pick method.

3.5.1 Reliability of the instruments

The reliability ensured by method of what is supposed to measure. Crobach Karlinger (2006)

alpha coefficient if more than 0.7 is acceptable and if less than not acceptable since is the

measure of reliability.

3.5.2 Validity of Instruments

Validity is consistency of research flow with content, purpose and the topic in line with

objectives. The items in the questionnaire were structurally checked in relations to objectives.

Validity is verified by expert supervisors.

3.6 Data Collection Procedures

The researcher was distributed to all selected respondents to fill in by the researcher was

herself administering and collect questionnaires filled daily to get required information.

3.7 Data Analysis Techniques

A data analysis was quantitatively analyzed by descriptive statistics using by means,

frequencies and percentages in tables form and was presented by use of tables.

14

CHAPTER FOUR

DATA ANALYSIS AND PRESENTATION

4.1 The Response Rate

The study asked the response rate from 52 questionnaire issued and found out that from 52

questionnaires issued to respondents, only a total of 40 questionnaires were returned

indicated 76% response rate while 26% of the respondents did not show there response, The

response rate was highest from due to is large populations in Coca Cola Kisii branch, this

indicated that all majority of the respondents were in agreement under the study as it was

suitable and the results were presented in table 4.1.

Table 4.1: Response Rate

Response Rate Number of Response %

Response rate 40 76

Non response rate 12 24

Total 52 100

Source: Researcher (2017)

The study show that there was positive response of the results

4.2 Demographic Characteristics

4. 2.1 Level of education

The study wanted to find out level of education and found that level of education has requiredfrom the results showed that the study revealed that number of respondents had gone through education as the majority with diploma as in table 4.2.

15

Table 4.2 Level of Education

Level of education No. of respondents Percentage

Degree 14 35

Diploma 22 55%

Masters 4 10%

Certificate 0 0

Total 40 100

Source: Field data (2017)

4.2.2 Title in the firm

The study asked the respondent to indicate their Title in the firm and found that supervisor at 55% followed by executive by masters with 35% and 10% respectively. The findings show that the majority of the respondents were supervisor.

Table 4.3 title in the firm

Title in the firm No. of respondents Percentage

Executive 14 35

Supervisor 22 55%

Masters 4 10%

Total 40 100

field data (2017)

The findings show that majority were supervisors in the company

4.3 Purchase Order Strategy

The respondent were asked to indicate relevant information that relates to Purchase order

strategy in procurement decision in your firm by level of agreement and found that Creation

of new product or qualitative improvement in existing product were highly strongly agreed

and Application of new industrial process was followed by Development of new material

sources or other new inputs. The findings show that application of new industrial process and

new forms of industrial procurement steps was strongly used with 4.25 and 4.55 respectively.

16

Table 4.4 purchase order

Aspects (1) 2 (3) (4) (5) fx fx/f

Creation of new product or

qualitative improvement in

existing product

0

9

4 0 14 22 174 4.35

Application of new industrial

process

2 0

4

0 22 16 170 4.25

New supplier market openings 9

4

8 6 14 3 96 2.4

Development of new material

sources or other new inputs

1

4

3 9 13 14 150 3.75

New forms of industrial

procurement steps

0

4

0 0 18 22 182 4.55

Field data (2017)

The study findings show that new forms of industrial procurement steps 4.35 and creation of new product or qualitative improvement 4.55 were strongly used. The study recommended that most of the respondents were to increase new supplier market openings and development of new material sources or other new inputs

4.4 Negotiation Planning Strategy

The sought to examine whether it is acceptable that consumers withdraw away from taking best negotiation planning practices of procurement change.

Table 4.5 Negotiation Planning Strategy

Aspect of best practices (1)2 3 (4) (5) F Fx fx/fStart with customer procurement 5

9

8 0 14 13 40 142 3.55

Have simple process for gathering

ideas

8 3 4 0 14 15 40 145 3.62

Engage the end consumer

immediately prototypes

0

4

0 0 18 22 40 182 4.55

Successful team effort. 1

4

0 9 14 16 40 164 4.1

Technology collaborations 25 7 14 12 40 149 3.75

Field data (2017)

17

The findings show that engage the end consumer immediately with simple concepts and prototypes 4.55 and Successful procurement is a team effort at 4.1. The study recommended that the firm have to use simple process for gathering ideas and Start with the customer with 3.55 and 3.62 respectively.

4.4 Technological Procurement Strategy

The study sought to assess the extent to which technological procurement strategy decision

affect performance.

Table 4.6 Technological strategy

Aspect (1) (2) (3) (4) (5) f fx fx/fDecision of new online

improvement in existing

documentation.

9 8 0 14 9 40 125 3.25

Use of quotation by

email process

8 2

4

0 14 16 40 148 3.7

Outcome of

markets openings

0

4

0 10 8 22 40 172 4.3

Development of

new raw-material sources or

other new inputs

4

4

0 9 14 13 40 152 3.8

Power of industrial

purchasing networks

6

4

9 8 8 9 40 125 3.125

Field data (2017)

The study show that some important aspects of company technological procurement

management were strongly recognized with Outcome of markets openings and Use of

quotation by email process with 4.3 and 3.7 respectively.

The study also indicated that technological procurement power are involved in the

development of the procurement decision and technological procurement is developed by

procurement and were adopted with procurement program team is composed together very

well company power drive.

The study was related to Martin (2014) who argued on the effects of the effectiveness of

planning procurement on emerging economy, the main objectives of the study was to

determine the effects of procurement performance on procurement processes. The study

referred as to as planning for procurement as a practical tool based on the internal business

knowledge and external skills on procurement in the number of dimension critical to

sustainable business and profitable ne

18

4.5 Performance

The study sought to examine procurement strategy affect productivity and service quality and

found that performance was highly identified with timeliness and quality at 3.875

Table 4.7 performance

Aspect (1) (2) (3) (4) (5) f fx fx/fOutput efficiency 9 8 5 9 9 40 85 2.125 Financial strength 8 1

4

17 14 0 40 117 2.925

Service delivery 1

4

6 7 14 12 40 150 3.75

Timeliness and quality 2

4

5 9 14 12 40 155 3.875

Field data (2017)

The study show that service delivery and timelines was strongly used as performance

indicators as table 4.8.

19

CHAPTER FIVE

SUMMARY, CONCLUSIONS AND RECOMMENDATIONS

5.1 Summary

The respondent were asked to indicate relevant information that relates to Purchase order

strategy in procurement decision in your firm by level of agreement and found that Creation

of new product or qualitative improvement in existing product were highly strongly agreed

and Application of new industrial process was followed by Development of new material

sources or other new inputs. The findings show that application of new industrial process and

new forms of industrial procurement steps was strongly used.

5.2 Conclusions

The study findings show that new forms of industrial procurement steps 4.35 and creation of new product or qualitative improvement 4.55 were strongly used. The study recommended that most of the respondents were to increase new supplier market openings and development of new material sources or other new inputs

5.3 Recommendations

The study recommended that whether it is acceptable that consumers withdraw away from

taking best negotiation planning practices of procurement change. The study should be used to

assess the extent to which technological procurement strategy decision affect performance. The

study show that service delivery and timelines was strongly used as performance indicators

5.4 Areas of future study

The study suggested that the study to be conducted on the effect of technological

procurement power on performance. The study also suggested for development of the

procurement decision and technological procurement is developed by procurement and were

adopted with procurement program team is composed together very well company power

drive.

20

References

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22

Appendices

Appendix I: Questionnaire

Questionnaire No…

Questionnaire One

Dear respondent, I am Thomson Divinah Nyachama carrying out a research under the supervision of Kisii University. The effects of procurement strategies on procurement performance of coca cola company in Kisii town.

Please spare about 30 minutes and help complete this questionnaire. There is no correct or

wrong response. All the information gathered is confidential and shall be used for academic

purposes only.

SECTION A: BACKGROUND INFORMATION

1. Please indicate the level of your education

Certificate [ ] degree [ ]

Masters [ ] Others [ ]

2. Please indicate your title in the firm.

Executive [ ] middle level management [ ]

Supervisor [ ] others [ ]

23

SECTION B : PURCHASE ORDER STRATEGY

3. Please tick (√), the appropriate box any relevant information that relates to Purchase

order strategy in procurement decision in your firm.

5 Strongly disagree, 4 Disagree 3 Neutral disagree 2 Agree 1 strongly disagree

Aspects (1) (2) (3) (4) (5)Creation of new product or qualitative

improvement in existing productApplication of new industrial process New supplier market openingsDevelopment of new material sources or other

new inputs New forms of industrial procurement steps

SECTION C NEGOTIATION PLANNING STRATEGY

4 It is acceptable that your consumers withdraw away from taking best negotiation planning

practices of procurement changes as in the table below. 5 Strongly disagree, 4 Disagree

3 Neutral 2 Agree 1 strongly disagree

Aspect of best practices (1) (2) l (3) (4) (5)Start with the customer procurementHave simple process for gathering ideasEngage the end consumer immediately

with simple concepts and prototypessuccessful procurement is a team effort.Technology procurement collaborations

SECTION D : TECHNOLOGICAL PROCUREMENT STRATEGY

5 Strongly disagree, 4 Disagree 3 Neutral disagree 2 Agree 1 strongly disagree

7. Tick (√), the extent to which technological procurement strategy decision affect

performance \

24

Aspect (1) (2) (3) (4) (5)Decision of new online improvement in

existing documentation.

Use of quotation by email processOutcome of markets openings Development of new raw-material

sources or other new inputsPower of industrial purchasing networks8. Please tick (√), the appropriate box I regard to some important aspects of company

technological procurement management. 5 Strongly disagree, 4 Disagree 3 Neutral

disagree 2 Agree 1 strongly disagree

Aspect (1) (2) (3) 4) (5)technological procurement power are

involved in the development of the

procurement decision technological procurement is developed by

procurementProcurement program team is composed

together very well company power driveProcurement strategy is implemented by

experts

SECTION E PERFORMANCE

5 Did procurement strategy affect productivity and service quality

5 Strongly disagree, 4 Disagree 3 Neutral disagree 2 Agree 1 strongly disagree

Aspect (1) (2) (3) (4) (5)Output efficiency Financial strength

25

Service deliveryTimeliness and quality

26