Business Strategies: An Antidote to Firm Profitability of Selected Flour Milling Companies in Nigeria

Abstract

The study of business strategies has drawn so much attention among business practitioners and academic researchers in the last two decades as globalization came fully into limelight. However, in Nigeria, there are few studies conducted to investigate the relationship between business strategies and firm profitability. This paper examined the effect of business strategies on profitability of selected flour milling companies in Nigeria. Data were collected through validated questionnaire administered to sixty eight respondents after establishing the reliability test. Multiple regression analysis was conducted to depict competitive advantage as a function of business strategies. The results (R 2 is 0.396 (F(6, 597) = 66.953, p=0.000) indicated that business strategies significantly affected profitability. However, the study also indicated that cost leadership (β = 0.288, t = 6.226, p<0.05), product differentiation (β = 0.283, t = 6.039, p<0.05) business diversification (β = 0.110, t = 2.415, p<0.05)and regrouping (β = 0.127, t = 2.933, p<0.05) have positive and significant effect on firm profitability in selected flour milling companies in Nigeria The result further showed that backward integration (β = 0.030, t = 0.779, p>0.05) has a positive and insignificant effect on firm profitability while market development (β =-0.015, t =-0.381, p>0.05) has a negative and insignificant effect on firm profitability in selected flour milling companies in Nigeria. The study recommends that production firms most especially the flour millers should integrate their business strategies with their day to day operations efficiently to enhance their backward integration, and market development they should also adopt the strategy/models that was developed in this study to align with their operations and target customers.

Business Strategies and Firm Profitability of Selected Mobile Operating Firms in Nigeria

“…This result affirms the studies of Zipporah et al ( 2018) that strategies influence organizational performance positively to a great extent resulting in increased organization profitability, business turnover and volumes of sale. Falana et al (2020) also found that business strategies have significant and positive effect on profitability of firms. Similarly, Sajdak (2015), Esmail, and Seyed (2016) have explored the link between business strategies and firm profitability.…”

“…The result of the study carried out by Falana et al (2020), revealed that business strategies have significant positive effect on profitability. Adinan and Abukari (2013) carried out a study on the effect of product differentiation on profitability and found that there is a positive relationship between product differentiation and profitability.…”