Abstract

This study explored the different competitive strategies used by the Licensed Buying Companies (LBC), the determinants of their choices and how it affected their performance. It also determined whether these strategies used influenced a farmer’s decision to sell the cocoa beans to the LBCs as well as the constraints faced by farmers and the LBCS in doing business. Primary data was used for this study. Descriptive statistics and econometric models were used to analyze the objectives. From this study, prompt payment and use of accurate weighing scale were identified as the most effective competitive strategies with high cost of financing and lack of farm inputs and tools being the major challenges faced by the LBCs and farmers respectively. Good social relation of the purchase clerk, age of the farmer and the distance between the LBC and cocoa farmer had positive significant effects on cocoa farmers’ decision in choosing a particular LBC. It is recommended that the government supports the LBCs with early financing to aid them in providing cocoa farmers with the needed inputs, tools and equipment to improve upon their outputs.

Key words: Licensed Buying Companies (LBC), Amansie West District, choice of LBC, cocoa purchases, competitive strategies, Ghana, return on investment.