Supply Diversification Strategy and Performance of Manufacturing Firms in Nakuru County, Kenya

Although manufacturing remains central to Kenya’s economic growth, contributing 7–10% of GDP, the sector continues to grapple with persistent supply chain disruptions that hinder firm performance. Against this backdrop, the study sought to evaluate the effect of supplier diversification strategy on the performance of manufacturing firms in Nakuru County, Kenya, with a primary focus on supplier diversification as the first objective. The study is significant to manufacturing firms as it provides insights into how supplier diversification, alongside other risk mitigation strategies, directly influences operational efficiency, resilience, and profitability. Anchored on the Resource-Based View, the research adopted a descriptive and explanatory design. The target population comprised managers, supply chain officers, and operations supervisors from all registered manufacturing firms in Nakuru County. A census approach was used due to the relatively small population size. Data was collected using structured questionnaires, piloted in Narok County, and refined for validity through Exploratory and Confirmatory Factor Analysis. Reliability was confirmed using Cronbach’s Alpha (threshold ≥ 0.7). Quantitative data were analyzed using descriptive statistics (means, frequencies, percentages) and inferential statistics (correlation and regression analysis) with SPSS software. Results confirmed that supplier diversification is statistically a significant determinant of firm performance. Supplier diversification emerged as a critical enabler of continuity, reducing dependency on single sources and enhancing resilience against disruptions. Accordingly, it recommends that policymakers incentivize supplier diversification, firms institutionalize structured multi-sourcing practices, and government agencies support digitization and mapping tools to enhance visibility, coordination, and proactive risk management for long-term competitiveness.