Turnaround Strategies in a Competitive Environment A Case Of Uchumi Supermarket

Abstract

This study seeks to analyze the turnaround strategies in a competitive environment a case of Uchumi Supermarket. The study was guided by the following specific objectives; to evaluate the turnaround process in a competitive environment, to determine the turnaround strategies in a competitive that should be adopted by Uchumi supermarket and to establish the challenges that Uchumi supermarket may face in adoption of the turnaround strategies in a competitive environment. In conducting this a descriptive research design was adopted. The population for the study was the 84 respondents. The sampling frame was 84 employees comprised top level management, middle level management and lower level management staffs at the Uchumi supermarket head office. A sample of 50% of the total population was thus considered sufficient and was used therefore 42 respondents constituted the sample population for the study and simple random sampling was used. The study carried out a pilot study to pretest and validates the questionnaire. The researcher selected a pilot group of 9 individuals from the target population to test the reliability of the research instrument. The study used primary data in form of questionnaire that was administered through drop and pick method to respondents who were the owners or the managers of the SMEs. Analysis was done by use of Excel and SPSS software. This generated frequency distributions, tables, percentages and mean. The study established that Uchumi Supermarket used a number of turnaround strategies in order to survive in the present competitive environment in Kenya. The strategies that were mostly used were repositioning and restructuring strategies, retrenchment and change in the top management of the company so as to make Uchumi Supermarket more competitive and also reduce the operational cost of the company. It was also established that turnaround strategy’s may help put back organisations to normality in terms of liquidity, solvency, profitability and cash flow. Finally, it was established Uchumi Super market faced a number of challenges when implementing turnaround strategies, key among them are resistance to change by the employees, inadequacy of resources and technology to facilitate the change, weak management and unaligned organizational system. It was concluded that the adoption of misplaced strategies is a cause of a company failure, a company decline leads to crisis where the survival of the firm is threatened and the major cause of a company failure lies within finance, operations and marketing the internal elements of its business. The study concluded that the turnaround strategy’s may help put back a company to normality in terms of liquidity and to achieve a successful turnaround a company management team must first stem a firm’s decline. The study concluded that companies face a number of challenges when implementing turnaround strategies, failure to ensure that companies’ daily activities, work efforts and resources are directed to the implementation of strategy has led to companies’ failure and companies have run into difficulties because of failure to acknowledge and address strategic drift. The study recommends that to enable companies implement the turnaround strategies companies must take advantage of the new technological opportunities, managers of companies need to create strategic management systems that integrate all disciplines and all areas of operation of the organization in outcome-based structures and the managers of organizations’ must critically look at their performance and compare it to other companies. Further it was recommended that turnaround strategies should be adopted in a competitive environment this is because they help put back companies to normality in terms of liquidity and the turnaround strategies that should be adopted are repositioning and restructuring strategies; retrenchment strategies and top management changes. Finally, it was recommended that management should put in place measures to reduce the challenges that face organisation in implementing turnaround strategies which include putting in place adequate resources to help implement the strategy, having proper plans and policies to implement the strategies and educating all levels of employees on the important of the strategy in order to help reduce resistance from them.