The Effect of Vertical Integration Practices on the Coffee Supply Chain Performance: The Case of Ethio-Gabana Trading Plc, Addis Ababa, Ethiopia
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Date
2023-06
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Addis Ababa University
Abstract
This study delves in to investigating the practice and effect of vertical integration on the coffee supply chain performance focusing on the case of Ethio-Gabana Trading plc. Drawing up on extensive theoretical literatures, the study conceptualized three VI dimensions: internal, supplier, and customer integration which serves as predictor variables, while supply chain performance was taken as an outcome variable and measured in terms of flexibility, responsiveness, quality, cost, and asset utilization capabilities. To reveal the causal-effect relationship between vertical integration and SCP, descriptive and explanatory research design with quantitative research approach were employed. And primary data was collected through the utilization of survey method and analyzed using both descriptive statistics (mean and standard deviation) and inferential statistics (Pearson correlation and multiple regression) via SPSS. The descriptive statistics result unveiled a strong practice of VI at all dimensions: internal, supplier and customer level at the company. Similarly, the analysis result of the company’s current supply chain performance revealed keen company capability in terms of flexibility, responsiveness, and asset management. However, the major challenges lie under cost and quality management capabilities which require immediate measures. Moreover, the Pearson correlation analysis demonstrates a moderate positive correlation between internal, supplier and customer integration with SCP. In addition, the regression analysis conformed the significant positive effect of internal integration, supplier integration and customer integration on SCP. Based on these findings, the company is better to take quality and cost optimization measure inline to upgrading the level of integration across all levels of the supply chain for driving improved SCP.
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Keywords
Vertical Integration, Customer Integration