Price Stability of Supply Chain Inputs in Fast Food Industry

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dc.contributor.author Wambugu, Angela Muthoni
dc.date.accessioned 2021-07-30T13:22:06Z
dc.date.available 2021-07-30T13:22:06Z
dc.date.issued 2012
dc.identifier.uri http://erepo.usiu.ac.ke/11732/6617
dc.description A Project Report Submitted to the Chandaria School of Business in Partial Fulfillment of the Requirements for the Degree of Masters in Business Administration (MBA) en_US
dc.description.abstract The purpose of this study was to determine the strategies and practices that are put in place to maintain price stability of supply chain inputs in the fast food industry. The study is of major importance to fast food companies as they will be able to discover strategies they can use to stabilize the supply chain input costs hence increase profit levels. The study was guided by the following research questions, how does price stability of inputs affect profit margins in fast food companies; What strategic measures can be put in place to maintain price stability of inputs; What major drawbacks do companies face while attempting to stabilize prices of inputs. The research design was descriptive in nature focusing on fast food companies in Nairobi. The design was descriptive because it involved observing and describing the behavior of fast food companies as they seek to maintain price stability in their supply chain. Having observed and analyzed the strategies the companies use, the research narrows down to the most effective strategies of managing price stability of inputs. Stratified sampling technique was used to select the sample of 30 respondents from different fast food companies to be interviewed. A total of 23 respondents were then interviewed and the data was presented graphically using tables and figures. The tool that was used for analysis is Statistical Package for Social Science (SPSS) and Microsoft Excel. The major findings established that 75% of the fast food companies sampled agreed that supply chain prices are not stable and this affects their profit margins negatively. Other operational factors such as gross sales were also considered as major factors that affect the profitability of the company with 78% of the respondents confirming the same. On the question of what strategic measures can be put in place to maintain price stability of inputs, the findings indicated that negotiating for bulk rates with suppliers was the most effective strategy on maintain price stability of inputs with 74% of the respondents supporting this strategy. Lastly, the major drawbacks that fast food companies face when attempting to stabilize price of inputs is inflation. The respondents (74%) admitted that inflation was the major drawback especially while dealing with the suppliers. Inflation tends to be beyond the control of both parties when negotiating and this makes it difficult to reduce costs of supplies. In conclusion, prices of inputs in the fast food industry are unstable and this affects profitability negatively hence there is need for strategies to manage the instability of input prices. Another conclusion was that fast food companies are intrinsically different and one strategy may be effective in one company and not another depending on the size of the company and the composition of staff members. The experience of the management or staff members is crucial to determining whether a strategy will be effective or not, especially the implementation process of the chosen strategy. Companies with better or more experienced employees tend to implement different strategies effectively. With regard to the drawbacks faced when trying to stabilize input prices, it is important to concentrate and solve the drawbacks that are within the companies control and make contingencies for issues such as inflation that arc beyond the companies’ control. The research recommended that companies should clearly understand the operational capacity of the company before choosing and implementing a cost saving strategy. Poor implementation of a strategy may lead to grave failure. Resources should be carefully allocated to the specific strategies and monitoring of the strategic process is fundamental in ensuring good implementation. en_US
dc.publisher United States International University - Africa en_US
dc.subject Price Stability en_US
dc.subject Supply Chain Inputs en_US
dc.subject Fast Food Industry en_US
dc.title Price Stability of Supply Chain Inputs in Fast Food Industry en_US
dc.type Thesis en_US

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