Strategies to enhance competitiveness: the case of rose flower farms in Wakiso

Abstract

Uganda has been dependent on agricultural export revenues from a small number of traditional, low-value, bulky commodities such as coffee, cocoa or cotton for which much of the terms of trade have been continuously declining over the past three decades. Today, Uganda has diversified its export base to include non-traditional agricultural export products (NTAE) such as fruits, vegetables, oilseeds, fish, hides and skins, pepper, vanilla, maize and cut flowers. Uganda diversified its export base in flowers in 1993. Identifying a competitive position that is profitable and sustainable against the forces that determine competition can increase the market share of the flower industry. Such a position could be attained through use of competitive strategies that have been developed in the light of the nature of the industry and its competitors. To enhance the industry’s competitiveness in the market place, the Uganda Flower Exporters Association defined a range of strategies for adoption in form of the Uganda Floriculture strategy 2005-2010. In order to achieve and maintain competitiveness managers of flower farms are searching for appropriate strategies that they can use to beat competition. The study used the concept of competitive strategy to identify factors that individual producer flower farms should adopt to improve the viability of their businesses. A multiple regression model was used to estimate the effect of competitive strategies on the overall financial performance of flower farms. The results should provide fresh insights into what counts when trying to improve the performance of farm businesses. The study findings indicated that cost of production inputs, operating efficiency and operating size were attributes of competitive strategy that were significant to profitability in the flower business. The study indicated that bulk purchase of inputs realized cost reduction on purchases and propagation of planting materials realized cost saving. Farms that trained personnel in various disciplines improved on their operational efficiency and hence had better financial performance. Furthermore, operating size as measured by export volume was found to have a significant effect on financial performance. Owners of flower farms should therefore consider adopting those strategies, which positively impact on financial performance.