Business Strategies and Firm Profitability of Selected Mobile Operating Firms in Nigeria
DOI:
https://doi.org/10.47672/ijbs.1489Keywords:
Business Strategies, Customer Experience, Firm Profitability.Abstract
Purpose: Firms economic and financial growth are the major goals of organizations across the globe to beat competition and survive in the unfriendly business environment. However, despite the positive impact of the mobile telecommunication sector to social and economic development, the mobile operating firms are plagued with challenges militating against the expected growth rate. This is evident in decline in market growth, dwindling profitability and decline in productivity. This study examined business strategies and firm profitability of mobile operating firms in Nigeria.
Methodology: The study adopted survey research design. The population of the study was 436 management staff of the selected mobile operating firms in Nigeria. The enumeration sampling method was used. A structured adapted and validated questionnaire was administered. Cronbach's alpha reliability coefficients for the constructs ranged from 0.71- 0.79. The response rate was 83.3%. Data were analyzed using descriptive and inferential (multiple regression) statistics.
Findings: The study revealed business strategies have significant effect on profitability (Adj. R2 = 0.469; F (4, 358) = 81.082, P < 0.05). The study concluded that business strategies (cost leadership, product differentiation, product leadership and service delivery) influenced market growth, firm profitability and productivity of selected mobile operating firms in Nigeria.
Recommendation: The study recommended that for mobile operator's companies to achieve targeted profitability, business strategies measures such as cost leadership, product differentiation, product leadership and service delivery should be given high level of priority.
Downloads
References
Aashish, P. (2021). Business strategy, definition, levels, components and examples. Journal of Entrepreneurial guide, 3(10), 1-2.
Abdulwase, R., Ahmed, F.A. A., Nasr, F. & Alyousfi, A. (2020). The role of business strategy to create a competitive advantage in the organization. Open Access Journal of Science, 4(4),135-138. DOI: 10.15406/oajs.2020.04.00162
Abolarinwa, S. I., Asogwa, C. I., Ezenwakwelu, C. A., Timinepere O. C., & Adedoyin, S. (2020) Corporate growth strategies and financial performance of quoted manufacturing firms in Nigeria: The mediating role of global economic crises. Cogent Economics & Finance, 8(1), 1-18. https://doi.org/10.1080/23322039.2020.1750259
Adamu, A. A., Dantsoho, M. A., Abdullahi, N., Balkisu, A., Ringim, K. J., & Zakari, A. H. (2021). Effect of Relationship Marketing on Performance of MTN Nigeria. FUDMA Journal of Management Sciences, 1(1), 331-349.
Adeoti, J.O., Gbadeyan, R.A., Olawale, Y. A., & Adeyemi, E. A. (2017). Effect of customer- driven marketing strategy on market share of telecommunication organization (case study of MTN Nigeria Limited). International Journal of Law, Humanities & Social Science, 1(6), 5-16.
Adimo, A. A. (2018). Relationship between product differentiation strategies and organizational performance in Sameer Africa Kenya Limited. British Journal of Marketing Studies, 6(3), 60-72.
Adinan, B. S., & Abukari, M. (2013). The effect of product differentiation on profitability in the petroleum industry of Ghana. European Journal of Business and Innovation Research, 1(4), 49-65. http://www.eajournals.org/wp-content/uploads/The-Effect-of-Product-Differentiation-on-Profitability-in-the-Petroleum-Industry-of-Ghana.pdf
Akingbade, W.A., (2015). Competitive strategies and improved performance of selected Nigeria telecomunication companies. Journal of Entrepreneurship, Management and Innovation,10(4), 143. https://jemi.edu.pl/uploadedFiles/file/all-issues/vol10/issue4/JEMI_Vol10_Issue4_2014_Article6.pdf
Anwar, M. N., & Daniel, E. (2016). Entrepreneurial marketing in online businesses: The case of ethnic minority entrepreneurs in the UK. Qualitative Market Research: An International Journal, 19(3), 310-338.
Anyeni, A., (2013). The role of infrastructure in business: Akenya scenario. International Journal of Professional Management, 8(1), 1-6. https://www.academia.edu/14145086/The_Role_of_Infrastructure_in_Business_A_Kenyan_Scenario
Arif, M. A., & Quin, S. (2015). Interlinking service delivery innovation and service quality: A conceptual framework. Journal of Applied Business Research, 31(5), 1-16. https://doi.org/10.19030/jabr.v31i5.9393
Arthur, A.T., & Alonzo, J.S., (2010). Strategic management concepts & cases. Irwin/Mcraw Hill. https://www.semanticscholar.org/paper/Strategic-Management%3A-Concepts-and-Cases-Thompson-Strickland/b7adb4edbde106919493f0810c9cfec7dbaf2e2d
Barreto, I. (2010). Dynamic capabilities: A review of past research and an agenda for the future. Journal of Management, 36(1), 256-280. https://doi.org/10.1177/0149206309350776
Berry, R.S. (2022). What is product leadership? https://www.trychameleon.com.
Bhasin, H. (2021). Product leadership definition, strategy and responsibilities. Journal of Marketing, 6(15), 5-10. https://www.marketing91.com/product-leadership/
Blau, P. M. (1964). Exchange and power in social life. New York: Wiley. https://www.routledge.com/Exchange-and-Power-in-Social-Life/Blau/p/book/9780887386282
Bodhanwala, S., & Bodhanwala, R. (2018). Does corporate sustainability impact firm profitability. Evidence from India. Management Decision, 56(8), 1734-1747. DOI:10.1108/MD-04-2017-0381
Brigham, E.A., Gapenski, L.C., & Ehrhardt, M.C. (2009). Developing competence profile of financial officer. European Journal of Social and Behavioral Sciences, 10(3), 143.
Cassia, F. & Magno, F. (2019). A framework to manage business-to-business branding strategies, EuroMed Journal of Business, 14(2), 110-122.
Cheche, S. G. & Muathe, S. (2014). A critical review of literature on performance contracting. semantischolar.org. http://ir-library.ku.ac.ke/handle/123456789/13075
Chepchirchir, A.B., Omillo, F., & Munyua, J. (2018). Effect of cost leadership strategy on organizational performance of logistic firms at Jomo Kenyatta international airport Kenya. European Journal of Management and Marketing Studies, 3(3), 76-86. DOI: http://dx.doi.org/10.46827/ejmms.v0i0.437
David, C.N., & Okeyo, W. (2018). Strategic planning, external environment and performance of county governments in Kenya. Achives of Business Research, 5(9), 1-15. DOI: https://doi.org/10.14738/abr.69.5247
Davis, G. F., & Cobb, J.A. (2010). Resource dependency theory: past and future. Journal of Research in sociology of organizations, 28(11), 21-42. http://dx.doi.org/10.1108/S0733-558X(2010)0000028006
Di Stefano, G., Peteraf, M. A. & Verona, G. (2010). Dynamic capabilities deconstructed. Industrial and Corporate Change,19 (4),1187-1204
Dugguh, S. I., Aki, I. & Oke, S. (2018). Impact of growth strategies on business profit a study of Ashakacem Plc, Gombe-Nigeria. Journal of Business and Management, 2(1), 23-29. DOI: 10.9790/487X-2002092329
Emerson, R. M. (1962). Power-dependence relations. American Sociological Review, 27, 31-40. https://doi.org/10.2307/2089716
Esmail, T. & Seyed, V. M. M. (2016). Location, industry competition and profitability. Asian Journal of Finance and Accounting, 8(2), 32-45. http://dx.doi.org/10.5296/ajfa.v8i2.9632
Falana,R.B., Egwakhe, J.A., Magaji, N. & Asikhia, O. (2020). Business Strategies: An antidote to firm profitability of selected flour milling companies in Nigeria. International Journal of Innovative Research and Development, 9(2), 70-77. DOI: 10.24940/ijird/2020/v9/i2/FEB20045
Gibson, C.H. (2009). Financial statement analysis, 13th International Edition, South western GENGATE Learning. https://goo.gl/pfnmSY
Gumel, B. I. (2019). The impact of strategic planning on growth of small businesses in Nigeria. Seisense Journal of Management, 2(1), 10-15.
Haque, M., Munawaroh, M., Sunarsi, D. & Baharuddin, A. (2021). Competitive advantage in cost leadership and differentiation of SMES "Bakoel Zee". Marketing strategy in BSD. Pinisi Discretion Review, 4(2), 277. DOI:10.26858/pdr.v4i2.19962
Harjadi, D., Arrarin, I., & Sagita, D. (2022). Customer Satisfaction on Yamaha motorcycles: a study of produc differentiation and brand reputation. Journal of Economics, 3(3), 591595. DOI 10.47065/ekuitas.v3i3.1369
Hikmah, H., Ratnawati, A.I. & Darmento, S. (2022). The role of product differentiation and word of mouth on purchase decision. 5th FTRST T3 International Conference, 86-90 file:///C:/Users/Admin/Downloads/125970220.pdf
Hilman, A. J., Withers, M.C., & Collins B. J. (2009). Resource dependence theory: A review. Journal of Management, 23(9), 10-40. https://doi.org/10.1177/0149206309343469
Hwa, D.Y., Sambock, P., & Jonghyun, K. (2019) The effects of business strategy and inventory on the relationship between sales manipulation and future profitability. Journal of Sustainability,16(22),1-18. DOI:10.3390/su11082377
Ibrahim, A.O., Olumuyiwa, G.Y. & Bamidele, M. (2018). Determinants of firm profitability in Nigeria. Journal of Economics and Business, 68(1), 43-58. DOI: 10.1177/09721509211046336
Jacobs, D. (1974). Dependency and vulnerability: An exchange approach to the control of organizations. Administrative Science Quarterly, 19, 45-59. https://doi.org/10.2307/2391787
Khawaja, S. & Khalid, S.U. (2022). Retooling governance for improving public service delivery: case study of right to public service commission Parkistan. Journal of Governance, 35(2), 421-436. https://doi.org/10.1111/gove.12607
Kimiti, P. G., Muathe, S. M. A., & Murigi, E. M. (2020). Cost leadership strategy, competitive advantage, and performance: A cross-sectional study in the context of milk processing firms in Kenya. International Journal of Management, Innovation & Entrepreneurial Research, 6(2), 64-76. DOI:10.18510/ijmier.2020.627
Kimuru, P. M. (2018). Determinants of growth in youth owned micro and small enterprises in Kenya (Doctoral dissertation, JKUAT-COHRED).
Kong, D., Yang, X., Liu, C. and Yang, W. (2019). Business strategy and firm efforts on environmental protection: Evidence from China. Journal of Business Strategy and the Environment, 29(2), 445-464. DOI: 10.1002/bse.2376
Lawrence, O. O., & Geoff, G. (2016). Infrastructure deficiency and the performance of small- and medium-sized enterprises in Nigeria's liberalized economy. Research Journal in Management Sciences, 2(1),1-10. http://dx.doi.org/10.4102/ac.v16i1.339
Lin, C., Tsai, H. I., & Wu, J.C. (2014). Collaboration strategy decision making using the miles and snow typology. Journal of Business Research, 67(9), 79-90. DOI: 10.1016/j.jbusres.2013.10.013
Luoma, M. (2015). Revisiting the strategy performance linkage. An application of an empirically derived typology of strategy content area. Journal of Management Decision, 53(5), 1083- 1106. DOI:10.1108/JABS-07-2015-0096
Margret, O., Enos, B.A, Partrick, G.K., Irene, K., & Japhet, M. (2014). Marketing strategies for profitability: a case of Safaricom ltd in Kenya telecommunication industry. International Journal of Scientific and Research Publications, 4(5), 1-5. https://www.ijsrp.org/research-paper-0514/ijsrp-p2943.pdf
Markus, S.E.S. (2015). The power of product leadership in generating customers' intentions to buy: the case of dagadu. Journal of Indonesian Economy and Business, 30(2), 159 - 172. DOI:10.22146/jieb.9964
Mbah, P.C., Ekechukwu, C., Ede, T.E., Ugorji, O.S., & Egbudu, P.C. (2020). Does product differentiation strategy influence output: An assessment of food beverages and tobacco manufacturing firms in south east Nigeria. Palarch's Journal of Archaeology of Egypt. 17(9), 1-13. https://archives.palarch.nl/index.php/jae/article/view/5184/5112
Melta, C., & Simona, M.C. (2017). Types of innovation in the Gech republic. Journal of Innovation and Business Practice, 3(6), 20-35. DOI:10.5171/2017.753806
Mohamed, M., Ndinya, A., & Ogada, M. (2019). Influence of cost leadership strategy on performance of medium scale miners in Taita Taveta county, Kenya. International Journal of Development and Management Review, 14(1), 1-20. https://www.ajol.info/index.php/ijdmr/article/view/186552
Mojekwu, J. N., & Iwuji, I. I. (2019). Factors affecting capacity utilization decisions in Nigeria: A time series analysis. International Business Research Journal, 11(7), 10-20. DOI:10.5539/ibr.v5n1p157
Muasa, S. M. (2014). Cost leadership strategy and sustainable competitive advantage of Naivas supermarket limited in Kenya (Doctoral dissertation, University of Nairobi).
Mughees, T. B., Shahid, M. H., & Arslan, M. (2017). Impact of credit constraints on Firms growth: A case study of manufacturing sector of Pakistan. Journal of Quantitative Methods, 1(1), 24-32 https://www.iosrjournals.org/iosr-jbm/papers/Vol7-issue1/D0712432.pdf
Musi, Y.W., Mukulu, E & Oloko, M. (2018). Influence of strategic planning to firm performance in agricultural research-based institutions of Kenya. Journal of Management and Sustainability, 25(11), 201-225. DOI:10.5539/jms.v8n4p83
Muthama, T. M., & Karanja, N. (2012). Influence of competitive intelligence on profitability of mobile telecommunication companies In Kenya. International Journal of Scientific and Research Publications, 1(11), 229 - 249. https://internationaljournalcorner.com/index.php/ijird_ojs/article/download/132863/92070
Ndambuki, A. Bowen, M. & Karau, J. (2017). The effects of business strategies on growth of market share in the telecommunications industry in Kenya: a case study of Telkom Kenya. European Journal of Business and Strategic Management, 2(4), 16-32.
Njuguna, S.N & Waithaka, P. (2020 ). Cost leadership strategy and organizational performance: A case of insurance companies in Niyen country Kenya. Academic Journal of Human Resource and Business Administration, 3(19), 256-267. http://ir-library.ku.ac.ke/handle/123456789/20762
Nwakama, I.C., Asiegbu, B.C., Eze, U.F., & Dibia, O.A. (2014). Acritical appraisal of the telecommunication industry and economic growth in Nigeria. World Journal of Globalization and technology development, 1(1), 1-18. http://www.wjgtd.com/WJGTD_Vol.%201,%20No.%201,%20February%202014/A%20CRITICAL.pdf
Ogbaro, E. O., & Omotoso, D. C. (2017). The impact of infrastructure development on economic growth in Nigeria. Nigerian Journal of Management Sciences, 6(1), 270-275. https://www.bsum.edu.ng/njms/pdf/vol6N2/njmsVol6No231.pdf
Ogola, G.O., & Nzulwa, J. (2018). Influence of performance contracting on service delivery in state corporations in Kenya. Journal of Business and change management, 13(10), 1-20. http://www.strategicjournals.com/index.php/journal/article/view/888
Okangi, F.P. (2019). The impacts of entrepreneurial orientation on the profitability growth of construction firms in Tanzania. Journal of Global Entrepreneurship Research, 10(3), 2337. https://link.springer.com/article/10.1186/s40497-018-0143-1
Okangi, F.P. (2019). The impacts of entrepreneurial orientation on the profitability growth of construction firms in Tanzania. Journal of Global Entrepreneurship Research, 10(3), 2337. https://link.springer.com/article/10.1186/s40497-018-0143-1
Olusanya, O. O., & Oluwasanya, A. T., (2014). Effect of strategic planning on the growth and survival of an emerging firm. American Journal of Engineering Research, 3(2), 230-239. https://www.ajer.org/papers/v3(2)/ZD32230239.pdf
Oluwafemi, O. J. & Adebiyi, S.O. (2018). Customer loyalty and integrated marketing Communications among subscribers of telecommunication firms in Lagos metropolis, Nigeria. Journal of Competitiveness,10(3), 101.
Onyango, J. J. (2017). Influence of Cost Leadership, Differentiation and Focus Strategies on Firm Competiveness: The Case of Boc Kenya Limited (Doctoral dissertation, United States International University-Africa).
Oyedijo, A. (2013). Business policy and strategic management. 2nd Edition, Ikeja strategic international press
Parnell, J. A., Koseoghu, M. A., Long, Z. & Spillan, J. (2012). Competitive strategy, uncertainty and performance. An exploratory assessment of China and Turkey. Journal of Transnational Management, 17(12), 91-117. DOI: 10.1108/00251740810846716
Patil, S.T., & Marathe, S. (2016). Market orientation and flexibility in production planning in SMEs: An empirical study. International Research Journal of Multidisciplinary studies, 2(7), 1-5. https://www.academia.edu/15280395/Market_Orientation_and_Planning_Flexibility_in_SMEs_Performance_Implications_and_an_Empirical_Investigation
Pfeffer, J., & Salancik, G. R. (2003). The external control of organizations: A resource dependence perspective. Stanford University Press. https://www.gsb.stanford.edu/faculty-research/books/external-control-organizations-resource-dependence-perspective
Preshani, L.B., Sachith, B. G., Samaradeera, L. D. & Samarakkody, S.P. (2021). Operations research in telecommunication. International Journal of Advance Engineering and Research Development, 8(10), 5-71.
Rahman, H., (2011). Relationship between product differentiation strategies and organizational performance in Sameer Africa Kenya limited. British Journal of Marketing studies, 6(3), 60-72. https://www.eajournals.org/wp-content/uploads/Relationship-between-Product-Differentiation-Strategies-and-Organizational-Performance-in-Sameer-Africa-Kenya-Limited.pdf
Reilly, O. (2018). How top product managers launch awesome products and build successful teams. www.oreilly.com.
Rofiq, A., & Pramono, S. (2019). The role of strategic planning and flexibility in shaping SMEs market orientation in turbulent business environment. European Research Studies Journal, 22(1), 221-236. DOI: 10.35808/ersj/1420
Sajdak, M. (2015). The compilation of operational and strategic agility for ensuring the highest efficiency of company operations. Journal of Economics, 1(10), 61-85. DOI:10.12846/J.EM.2015.02.03
Serebwa, P. S., Njeru, W., & Maina, K. (2017). Performance Target Setting and Employee Service Delivery at Kirinyaga University, Kenya.
Shittu, A.K. (2020). Public service and service delivery. Journal of Public Administration, Public Policy and Governance, 10(7), 3-16. https://www.academia.edu/44225442/Public_Service_and_Service_Delivery
Shulman, P. A. (2021). What infrastructure really means. The Atlantic.com.
Son, K. N., Xuan, V. V. and Thi, M. T. V. (2020). Innovative strategies and corporate profitability: the positive resources dependence from political network. Heliyon Journal, 6(4), 21-35. doi: 10.1016/j.heliyon.2020.e03788
Spyropoulou, S.,Katsikeras, C.S, Skarmeas, D., & Morgan, N.A. (2018). Strategic role accomplishment in public ventures: the role of capabilities, knowledge and environment. Journal of Academy of Marketing Science, 46(1), 109-129. https://doi.org/10.1007/s11747-017-0519-8
Stanley, K., Fred, M., & Gregory, N. (2016). The effects of product differentiation strategy on corporate growth in selected microfinance institutions in Kenya. International Journal for Research in Business, Management and Accounting, 2(6), 13-28. https://www.noveltyjournals.com/upload/paper/Effects%20of%20Product%20Differentiation-420.pdf
Stefea, C. (2012). Firm profitability. Journal of Entrepreneurship, 10(1), 133-149. https://dergipark.org.tr/tr/download/article-file/374494
Yoo, S. K., & Kim, B. Y. (2018). A decision-making model for adopting a cloud computing system. Sustainability, 10(8), 2952.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2023 Ogungbesan F., Egwakhe J.A., Akpa, V.O.
This work is licensed under a Creative Commons Attribution 4.0 International License.
Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution (CC-BY) 4.0 License that allows others to share the work with an acknowledgment of the work's authorship and initial publication in this journal.
