The Cut Flower Cluster in Kenya - Essay Example

These include the overall economic performance and its subsequent effects upon the local and the international consumers. Similarly, there is the aspect of macro performance that entails several things. For instance, in terms of the national Gross Domestic Product (GDP), cut flower has been very influential. It contributes about 8% in terms of total export revenues. On the other hand, there is the contribution of productivity has been high accompanied by profitability margins. This has been facilitated by the inadequate competitiveness that guides the innovation and productivity of cut flower in Kenya (Zeng 2008, p. 153). In other words, there has been tremendous improvement on the transaction costs that work towards the boosting of productivity and overall efficiency.

The productivity has also been able to received sustenance from the export growth that has not decreased making productivity a fundamental choice of macro performance. However, there has also been the effect of the cut flower grown in Kenya in the context of inflation in the outlook of the country’s economy. For example, transporters of the cut flower have experienced the instances of high inflation costs especially with the fall of the dollar in the local and global market. This is because it affects the prices of the local production that is paramount in the boosting the average productivity.

Alternatively, there is also the revenue generated from exports that are also affected by the high inflation of the new dollar economy. Therefore, it may be added that the fall of inflation has also helped in the cut of about 14% of the cut flower prices in the global market (Webber & Labaster 2010, p.66). This suggests that one-third of total supplies are current being sold in Europe to accrue export revenues and an increase in productivity. Cut flower also has an adverse effect on the currency of the nation in the context of the effects on the