Innovative strategies and firm growth: evidence from selected fast moving consumer goods firms in Lagos state, Nigeria
-
DOIhttp://dx.doi.org/10.21511/ppm.17(2).2019.24
-
Article InfoVolume 17 2019, Issue #2, pp. 313-322
- Cited by
- 1404 Views
-
419 Downloads
This work is licensed under a
Creative Commons Attribution 4.0 International License
Critical to the sustainability and continuous success of every organization is the performance concept. Hence, the cardinal goal of every organization is to achieve sustainable progressive performance for their organization. Several factors have been found to contribute to the performance of an organization. While empirical evidence indicated that innovativeness is one of the major determinants of organizational performance, many fast moving consumer goods (FMCG) were slow in their demonstration of innovative capability and it has been noted that the performance of these companies has not been impressive possibly due to the slow pace of innovativeness in the industry. This study thus investigated the effect of innovative strategies on the growth of selected FMCG firms in Lagos state, Nigeria. Survey research design was adopted for the study. The population comprised 1,337 top and middle level management staff of four notable players in the FMCG industry in the state (Honeywell flower mills Plc, Dangote flower mills, Unilever Nigeria Plc, and Cadbury Nigeria Plc). Through proportionate stratified random sampling technique, 400 out of 1,337 were sampled for the study. Four hundred copies of a validated questionnaire with Cronbach’s alpha reliability coefficient ranging from 0.731 to 0.956 were administered to the sample with a response rate of 84.25%. Data were analyzed using both descriptive, as well as inferential statistics. Finding revealed that innovative strategies had a significant effect on growth of FMCG firms in Lagos state, Nigeria (R2 = 0.724, β = 0.887, t = 29.663, P ≤ 0.05). The study recommends that FMCG firms management need to initiate policies that will enhance innovativeness possibly through creation and proper funding of the research and development department to effectively drive growth of FMCG firms.
- Keywords
-
JEL Classification (Paper profile tab)D92, L25, M10
-
References48
-
Tables3
-
Figures1
-
- Figure 1. Simplified theoretical framework
-
- Table 1. Descriptive statistics of innovation strategies
- Table 2. Descriptive statistics of firm growth
- Table 3. Summary of regression analysis of innovation strategy and firms growth
-
- Anton, S. G. (2016). The impact of leverage on firm growth. Empirical evidence from Romanian listed firms. Review of Economic and Business Studies, 9(2), 147-158.
- Anupam, J., & Sharma, M. (2012). Brand awareness and customer prefrences for FMCG products in rural market: An empirical study on the rural market of Garhwal Region. VSRD International Journal of Business Management Research, 2(8), 434-443.
- Armstrong, M. (2006). A Handbook of Human Resource Management Practice (10th ed.). London: Kogan.
- Asman, R. M. (2013). Diversification Strategy and Performance of Kenyan Commercial State-owned Corporations (Unpublished Master of Business Administration Dissertation Submitted to the University of Nairobi).
- Bhuyan, D. P., & Tripathy, S. (2015). Competitive strategy and its impact on ITC portfolio. International Journal of Research in Mechanical Engineering & Technology, 5(1), 51-59.
- Bijuna, C., & Sequeira, A. (2012). Customer-based brand equity in the fast moving consumer goods industry in India. International Journal of management, 1(4), 1-19.
- Boz, I. T., Yigit, I., & Anil, I. (2013). The relationship between diversification strategy and organizational performance: A research intended for comparing Belgium and Turkey. Procedia, Social and Behavioral Sciences, 99(1), 997-1006.
- Braunerhjelm, P., Ding, D., & Thulin, P. (2016). Does innovation lead to firm growth? Explorative versus exploitative innovations (Swedish Entrepreneurship Forum Working Paper No. 2016:46) (43 p.).
- Buul, O. B., & Omundi, R. (2017). An analysis of competitive strategies and performance of small and medium enterprises in Kenya: A case of Nairobi central business district. Journal of Business and Strategic Management, 2(2), 72-94.
- Cook, S., Boekholt, P., & Todtling, F. (2007). Competitive advantage and competition policy in developing countries. New Jersey: Prentice Hall.
- Epstein, E. M. (2003). How to learn from the environment about the environment: A prerequisite for organization well-being. Journal of General Management, 29(1), 68-80.
- Erengwa, K. N., Nwuche, C. A., & Anyanwu, S. C. (2017). Employee participation and organizational survival in selected manufacturing firms in Port Harcourt, Nigeria. International Journal of Advanced Academic Research Social and Management Sciences, 3(3), 1-10.
- Frambach, R. T., Prabhu, J. C., & Verhallen, T. M. M. (2003). The influence of business strategy on new product activity: The role of market orientation. International Journal of Research in Marketing, 20(4), 377-397.
- Gunday, G., Ulosoy, G., Kilic, K., & Alpkan, L. (2011). Effects of Innovation Types on Firm Performance. International Journal of Production Economics, 133(2), 662-676.
- Gupta, P. D., Guha, S., & Krishnaswami, S. S. (2013). Firm growth and its determinants. Journal of Innovation and Entrepreneurship, 2, 1-14.
- Harrison, R., Jaumandreu, J., Mairesse, J., & Peters, B. (2014). Does innovation stimulate employment? A firm-level analysis using comparable micro-data from four European countries. International Journal of Industrial Organization, 35, 29-43.
- IBAN. (2016). A guide to inclusive business in the fast moving consumer goods (FMCG) sector.
- Ittner, C. D., & Larcker, D. F. (2003). Coming up short on nonfinancial performance measurement. Harvard Busines Review, 81(11), 88-95.
- Karlsson, C. & Tavassoli, S. (2015). Innovation strategy and firm performance. (CESIS Electronic Working Paper Series, Paper No. 401).
- Laforet, S. (2001). Size, strategic, and market orientation effects on innovation. Journal of Business Research, 61(7), 753-764.
- Lagos Business School (2016). Industry Report, Lagos. Pan-Atlantic University.
- Lekhanya, L. M., Olajumoke, N. G., & Nirmala, D. (2017). Exploring fast moving consumer goods (FMCG) small, medium, and micro enterprises manufactures’ need for innovation to achieve growth. Environmental Economics, 8(2), 8-16.
- Maurer, T. J., & Weiss, E. (2010). Continuous learning skill demands: Associations with managerial job content, age, and experience. Journal of Business and Psychology, 25(1), 1-13.
- Miller, A., Boehlje, M., & Dobbin, C. (2001). Key financial measures for farm general managers. West Lafayette: Purdue Extension.
- Morin, E. M. & Audebrand, L. K. (2014). Organizational performance and meaning of work: Correcting for restricted range.
- Muthoni, B. M. (2017). Effect of innovation on competitive advantage in fast moving consumer goods: A case of PZ cussons east Africa Ltd (MBA research project). Chandaria School of Business, United States International University, Nairobi, Kenya.
- Mwangi, A. N. (2016). The effects of diversification strategies on the performance of commercial banks in Kenya (Unpublished Master of Business Management Dissertation submitted to the University of Nairobi).
- Nwaeke, L. I., & Wodu, D. (2012). The effects of diversification on the corporate performance of business organizations in Nigeria. The Advanced Research Journal, 6, 199-220.
- Odumeru, J. A. (2013). Innovation and organizational performance. Kuwait Chapter of Arabian Journal of Business and Management Review, 2(12), 18-22.
- Olorunleke, K. G. (2017). Sales promotion and purchasing decision of fast-moving consumer goods in Ondo State. International Journal of Engineering Technology, Management, and Applied Sciences, 5(8), 42-53.
- Onyali, C. I., & Okerekeoti, C. U. (2018). Board heterogeneity and corporate performance of firms in Nigeria. International Journal of Academic Research in Nigeria, 8(3), 103-117.
- Oyedijo, A. (2012). Effects of product-market diversification strategy on corporate financial performance and growth: An empirical study of some companies in Nigeria. American International Journal of Contemporary Research, 2(3), 199-210.
- Porter, M. E. (1996). Competitive strategy: Creating and sustaining superior performance. New York: The Free Press.
- Porter, M. E. (2007). Competitive strategy: Techniques for analyzing industries and competitors. New York: The Free Press.
- Pradhan, J., & Misra, D. P. (2014). Rural brand awareness and preferences for FMCGs: An empirical study on Keonjhar district of Odisha, India. IOSR Journal of Business and Management, 16(9), 17-29.
- Richard, P. J., Devinney, T. M., Yip, G. S., & Johnson, G. (2009). Measuring organizational performance: Towards methodological best practice. Journal of Management, 35(3), 156-164.
- Robinson, D. T., & Sensoy, B. A. (2013). Do Private Equity Fund Managers Earn Their Fees? Compensation, Ownership, and Cash Flow Performance (Fisher College of Business Working Paper Series).
- Santarelli, E., & Tran, H. T. (2013). Diversification strategies and firm performance: A sample selection approach (Quaderni – Working Paper DSE No. 896).
- Sindhu, M. I., Ehtasham-Ul-Haq, & Ali, S. (2014). Impact of Diversification on the Firm’s Performance: An Evidence from Pakistan. European Journal of Business and Management, 6(4), 106-114.
- Sophia, O. M., & Owuor, D. (2015). Effects of strategic planning on organizational growth. (A case study of Kenya medical research institute, Kemri). International Journal of Scientific and Research Publications, 5(9), 1-15.
- Spescha, A., & Woerter, M. (2019). Innovation and firm growth over the business cycle. Industry and Innovation, 26(3), 321-347.
- Suh, C. J., & Lee, I. T. (2018). An empirical study on the manufacturing firm’s Strategic Choice for Sustainability in SMEs. Multidisplinary Digital Publishing Institude, 10(572), 1-23.
- Suhag, A. K. , Solangi, S. H., Larik, R. S. A., Lakho, M. K., & Tagar, A. H. (2017). The relationship of innovation with organizational performance. International Journal of Research, 5(2), 292-306.
- Syombua, M. R. (2014). Relationship between health and safety programmes and performamce of manufacturing firms in Mombasa County, Kenya (Masters Thesis). University of Nairobi, Kenya.
- Urbancova, H. (2013). Competitive advantage achievement through innovation and knowledge. Journal of competitiveness, 5(1), 82-96.
- Uremadu, S. O. (2018). The impact of capital structure on corporate performance in Nigeria: A quantitative study of consumer goods sector. Current Investigations in Agriculture and Current Research, 5(4).
- Wernerfelt, B. (1984). A resource-based view of the firm. Strategic Management Journal, 5(2), 171-180.
- Yamane, T. (1967). Statistics: An introductory analysis (2nd ed.). New York: Harper & Row.