Diversification Strategy and Performance of Manufacturing Firms in Nigeria

Abstract

Several numbers of factors has been account for the strategic approach to corporate diversification in the manufacturing sector in developing nations. Thus; Firms could consider diversification due to market saturation, declining demand competitive pressure, product line obsolescent, or if fair antitrust action no longer allow profit objectives to be met solely through an expansion of its current product and market activities. This research therefore examines the impact of diversification on the performance of Dangote Group of companies. The objective of the research is to specifically examine the extent to which product and market diversifications have improved the corporate performance in Dangote Group of Companies. The research elicited data from primary source while the respondents were reached using questionnaire. The data were analyzed using a five point’s likert scale and hypotheses were tested using linear regression analysis. The research revealed that diversification is a strategy for firms’ survival. In addition, diversification strategy increases market share of the organization as well as minimizing risk of operations. The research therefore recommends that diversified enterprises should strengthen their product diversification drive so as to remain in business. More so, the firms should study and improve their diversified techniques through product and market innovative strategies as this measure would guarantee sustainable performance of firms.