Factors Affecting on the Global Market Share of Sri Lankan Tea
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Date
2013
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Publisher
Uva Wellassa University of Sri Lanka
Abstract
The tea industry of Sri Lanka has not performed well recently in the competitive global tea
market. The slowing of growth is creating more global competition for market share. The
country is conceding its market share to emerging producers like Kenya and other African
producers. As the global tea industry is very competitive, the slow market growth means each
producer faces the challenge of maintaining their position (Ali et al, 1997). Market share is an
effective indicator of global competitiveness. Yet market share of Sri Lankan tea industry is
mainly affected by various internal and external factors. Therefore, this research was carried out
to determine the major internal factors affecting on the market share of Sri Lankan tea and to
forecast the trend of Market Share with the identified internal factors.
Methodology
Time series data on average black tea yield in Kilograms and Sri Lanka’s world percentage
share of tea exports from 1987 to 2011 were collected from statistical bulletin published by Sri
Lanka Tea Board and time series data on cost of production of tea, Free on board price (F.O.B
Price), value added percentage of GDP, Colombo auction prices, quantity sold at Colombo
auction from 1987 to 2011 were collected from annual reports of central bank of Sri Lanka,
which provided a total of 25 years tea industry data. MINITAB 15 software was used to get the
basic descriptive statistics, correlation, multiple regression analysis and Trend analysis.
Correlation analysis was done to determine the relationship between the factors. Then Multiple
Linear Regression was used to analyze the relationship between independent variables and
dependent variable. Trend analysis for Market share, Colombo auction price, cost of production
and productivity was employed by using Minitab 15 Statistical software and based on MAPE
value, the best model was selected.
Description
Keywords
Agriculture, Export Agriculture, Tea Industrials, Tea Technology, Marketing, Business Management