Strategic Capabilities and Success of Food-Processing Firms in Tanzania

Abstract

This article identifies firms’ strategic capabilities in the food-processing industry and establishes the extent to which they influence firms’ success. Based on multinomial regression results drawn from the survey of 105 food-processing firms in Tanzania, it is evident that the leadership and vision of owner-managers was the most significant strategic capability irrespective of the firms’ degree of success. The results also indicate that applying superior technology, the owner-managers’ experience and level of education, engaging highly skilled and specialised employees, and the ability to access capital and sustain market growth were significant in distinguishing successful from poor performing firms. In view of the findings, our article adds value to the existing literature by linking strategic capabilities with varying degrees of firms’ success in the context of a developing economy. It suggests that food-processing firms need to acquire and develop the identified strategic capabilities in order to succeed, especially in a context where the business environment is volatile and unpredictable. Policy makers should facilitate less successful food-processing firms to develop, retain and sustain the strategic capabilities that enable firms to be successful.