Impact Of Corporate Strategy On Investment Decision In Nigeria

Impact Of Corporate Strategy On Investment Decision In Nigeria

Abstract

The exploration work investigates the impact of commercial strategy on investment decision in Nigeria. Effective commercial strategy plays a critical part in defining the businesses in which a company will contend, rather in a way that focuses coffers on how to convert distinctive capability into competitive advantages. The broad ideal of the study is to probe whether Cadbury Nigeria plc strategic pattern affects the company’s expansion investment decision and also to probe how strategic pattern shows the growth and profitability of a establishment that’s increase in deals and request value. The primary source of data collection was used where stratified questionnaires were distributed to repliers. The simple arbitrary slice fashion was used to elect a sample size of 50 labor force. The chi-square statistical tool was used to test the stated suppositions and the findings revealed that the Net profit periphery, measures the overall establishment’s capability to turn each naira deals into profit. The study concludes that commercial strategy affects expansion investment opinions of associations, i.e. strategic pattern affects the company’s expansion investment decision. The study recommends among others that operation should support the need for a strategic frame for problem working under complications and the applicability of strategic considerations in investment planning.

Chapter One

Preface

Background to the Study

It’s glaring that investment opinions without a sound commercial strategy is like a boat without a rudder and a waste of time no wonder said that allowing coffers to investment without a sound generalities to divisional aid commercial strategy is a lot like throwing brickbats in a darkroom. Investment decision which involves a establishment’s decision to invest its current fund most efficiently in the long- term means in expectation of an anticipated inflow of benefit over a series of times include expansion accession, modernization and relief of the long term means, deals of a division or business( divestment), change in the system of deals distribution announcement crusade, exploration and development programme etc needs a well formulated strategy.

A well formulated strategy help to marshal and allocate an association coffers into a unique and feasible posture grounded on its relative interval capabilities and short appearances anticipated changes in the terrain and the contingent moves by intelligent opponent. thus, this study is aimed at fastening on the impact of overall commercial strategy on investment opinions in Nigeria with a particular emphasis on Cadbury Nigeria Plc to punctuate the effective and effective attainment of investment opinions of an association particularly on expansion in achieving a sustainable competitive advantage capital effectiveness and profitable long term growth and wealth maximization of shareholders.

Commercial strategy is the pattern of decision in a company that determines and reveals it objects, purposes or pretensions, produces the top programs and plans for achieving this pretensions and defines the ranges of business the company is to pursue, the kind or profitable and mortal association it’s or intend to be and the nature of the profitable and non profitable donation it intends to make to its shareholders, workers, guests and communities.

Effective commercial strategy plays a critical part in defining the businesses in which a company will contend, rather in a way that focuses coffers on how to convert distinctive capability into competitive advantages. It also means an ineffective commercial strategy will affect the overall performance of the association particularly the establishment’s investment decision since it the primary driven force( Verrechia, 2005), association must thus formulate a strategic decision that will determine the overall direction of the firm major pretensions, programs and action sequences into a cohesive total.

It becomes a matter of great concern to operation because any wrong step taken with a view of addressing any of the below taken will negatively affect the smooth handling of the association for case, the huge quantum of capital tied up in long term means in expectation of the anticipated cash inflow over a series of times that’s unrecoverable and indeed if reversible at substantial loss could be committed to other profitable adventure within a short period that will yield quick return. The internal and external terrain trends that gives the enterprises its identity. Its power to rally the strength and liability if success in the request place may solidify to formless reality of loss of sustainable competitive advantage, superior chops, superior position and coffers. As Charles Dawin said that it isn’t the strongest of the series that survive or the most intelligent, but the one most responsive to change. In the same way, if director don’t estimate their coffers in relative to contender’s strategy there will be no superior return over long term on investment( expand) and shareholders values, growth and competitive advantage will dissipate.

lately, a lot of emphasis has been placed on the view that a business establishment facing a complex aid changing terrain will profit immensely in terms of ameliorate quality of decision making if capital budgeting opinions are taken in the complex of its overall commercial strategy. This approach provides the decision making if capital budgeting opinions are taken in the complex of its overall commercial strategy. This approach provides the opinions maker with a central theme or a big picture to keep in mind at all times as a guideline for effectively allocating commercial fimucia1 coffers.

Statement of Problem

The practice of commercial strategy in relation to investment decision by business association in Nigeria is a new miracle; still, it’s tone apparent that no individual establishment is problem free. The problem to be addressed is; the effect of strategy on the establishment’s investment decision particularly on the area of expansion. How strategic pattern shows the growth and profitability of a establishment. From colorful business reviews, operation and account literatures read and discover more problems like What should we expand on or acquire within our core capabilities and coffers at hand? And what are the approach to allocating investment capital and coffers within the environment of the interval and external terrain trends.

Exploration Questions

1. Does Cadbury Nigeria plc strategic pattern affects the company’s expansion investment opinions?

2. How does strategic pattern shows the growth and profitability of a establishment?

3. What are the approach to allocating investment capital and coffers within the environment of the internal and external terrain trends?

Ideal of the study

The ideal of the study in line with the stated problems are

1. To probe whether Cadbury Nigeria plc strategic pattern affects the company’s expansion investment decision.

2. To probe how strategic pattern shows the growth and profitability of a establishment that’s increase in deals and request value

3. To probe what approach of allocating investment capital and coffers within the environment of the internal and external terrain.

Statement of Hypothesis

In line with the ideal of the study, the experimenter tested this thesis

thesis One

HO Cadbury Nigeria Plc strategic pattern doesn’t affect the company’s expansion investment opinions.

HI Cadbury Nigeria plc strategic pattern affects the company’s expansion investment opinions.

thesis Two

HO Strategic pattern doesn’t show the growth and profitability of a establishment.

HI Strategic pattern shows the growth and profitability of a establishment.

thesis Three

HO Allocating investment capital and coffers has no negative influence on internal and external terrain.

HI Allocating investment capital and coffers has negative influence on internal and external terrain.

Significance of the study

The significance of the study lies in its capability to unveil the benefit of commercial strategies to directors and the need to borrow a further rational approach to investment opinions in the complex and changing terrain where the establishment live rather than clinging to the traditional styles which is more or less a rule of thumb before committing the scarce coffers of an association to a decision which formerly taken and committed is unrecoverable.

To the general public, the study will serve as an eye nature to them on the significance of commercial strategy as they prepare to venture in any investment decision.

To this, experimenter the design provides an understanding and “ broad sapience ” to appreciate commercial strategy. The exploration also equips with the art and wisdom of carrying out a analogous or more complex exploration in the future.

Compass of the study

The exploration work is design to concentrate on the impact of commercial strategy on investment opinions of association. With particular emphasis on expansion opinions, other variables held constant. Cadbury Nigeria plc will be used as a case study, fastening on a five time fiscal summary of the company from 2011 – 2015.

Limitations of the study

The experimenter faces a number of challenges in the trouble to carry out a sound check among, which include

1. incapability to gain necessary information due to executive tailback , couples with the fact that some information were considered as nonpublic those don’t encourage sound exploration.

2. Time and finance, among other constraint hindered the experimenter from doing a more thorough and rigorous work.

Delineations of terms

1. Strategy it’s the pattern or plan that integrates an association’s major pretensions, programs and action sequence into a cohesive total.

2. Company Strategy Itis the game plan operation is using to stake- eschewal a request position conduct its operations, attract and please guests, cipher successfully and achieve organizational objects strategy entails directorial choices among druthers and signals organizational commitment to specific requests, competitive approaches and ways of operating.

3. Investment Decision Investment opinions are generally known as the capitalbudgeting or capital expenditure decision. Itmay be defined as the establishment’s decision to invest its current finances most efficiently in the long term means in expectation ofan anticipated inflow of benefits over a series of times.

4. Commercial Strategy It’s pattern of decision in a company that determines and reveals its objects, purposes, pretensions, produces the top programs and plans for achieving these pretensions and defines the range of business the company is to pursue to kind of profitable and mortal association it is, or intends to be and to make to its shareholders workers, guests and communities.