Analysis of Hybrid Diversification Strategy on Organizations’ Performance of Cement Firms in Kenya

Cement manufacturing firms in Kenya have experienced decline in performance. The firms have turned to innovative products diversification such as pre-cast concrete paving blocks and precast molded products. This research purposed to analyse hybrid diversification strategy effect on organizations' performance of Kenyan cement firms and to ascertain effect of firms` characteristics as a moderator between diversification strategy and organizations' performance of Kenyan cement firms. The study was backed up by resource-based review theory, the agency theory and the market view theory. The study was done in cement industrial sector in Kenya and all cement manufacturing firms were studied. The study used descriptive cross-sectional research design in collecting data relating to the research objective. Target population of research was all the marketing, finance, production managers and the assistant managers from the same departments who were used as important informants. The study had a total of 108 managers and supervisors as its target population. This being a census study, all the marketing, finance, production managers and their assistants were used in this study. In piloting of study tool, respondents were nominated from Savannah cement and were having the same noticeable features as those of main study. The scholar used questionnaire as a tool to collect data from the key informants. Quantitative technique was used to analyse data where descriptive and inferential statistics were used. Hybrid diversification strategy has a significant influence on organizations' performance of Kenyan cement firms. The firms combine low product costs and product differentiation to enhance survival and to gain ground in new markets hence increasing profit margins. The firms should adopt all possible hybrid strategies to enter into new markets while using quality control measures to ensure that the production is up to the required standards.