Driving Efficiency through Restructuring: Evaluating the Effectiveness of Cost Reduction Strategies on Tea Manufacturing Performance at Global Village Tea Factory, Uganda

Abstract

The performance of tea manufacturing industries significantly influences economic development, particularly in regions where tea production serves as a key economic driver. This study examined the impact of cost reduction strategies on the performance of Global Village Tea Factory, drawing upon Porter’s cost leadership theory. A quantitative research approach was adopted, utilizing correlation and descriptive survey research designs. The target population comprised 120 respondents, with a sample size of 92 determined using Yamane’s formula. Data collection was conducted through self-administered structured questionnaires, and analysis employed both descriptive and inferential statistics, with hypothesis testing at a 0.05 significance level. Correlation analysis revealed a weak but statistically significant positive relationship (r = 0.199, p < 0.05) between cost reduction strategies and industry performance, implying that while cost reduction contributes to performance, its influence is marginal and may not be the most effective strategy for substantial improvement. However, regression analysis indicated no significant relationship between cost reduction and diversification strategies (β = .046, t = 0.399, p = 0.691), suggesting that cost reduction alone may not be a strong determinant of performance. These findings underscore the need for tea manufacturers to explore alternative strategic approaches for enhanced competitiveness and efficiency. The study contributes to the existing body of knowledge by providing empirical insights into the effectiveness of cost leadership strategies in the tea industry, serving as a basis for future research and strategic decision-making in similar manufacturing contexts.