Impact of Diversification Strategy on Performance of Manufacturing Companies a Case Study of Dangote Group of Companies

Abstract

A number of wide raising factors account for the strategic appeal of corporate diversification. Au organization may consider diversification because of market saturation, competitive pressures, product line obsolescent declining demand or fair of anti-trust action. Diversification has evolved as a resistible tool of increasing a firm's revenue and consequently profit. It involves expanding the scope of operations of a company into other product lines. This entails some restructuring of the product mix of the firm to accommodate the new thrust. The choices of diversification over other growth strategies such as marger, acquisition, consolidation, etc. is influence by a firm's desire not to only safeguard its corporate entity, but also by the conviction of its ability to adequately cope with the structural operational, Financial and marketing demands of the strategy. Compared to other growth strategies like consolidation, diversification exacts a less significant shift in major corporate activity. Its efficiency lies in the fact that it involves an extension of a firm’s already existing capacity, acquisition of necessary facilities for the purpose of meeting the peculiar specifications of the new product lines. It is therefore cost effective in relation to other expansion and growth methods. The study aimed at Assessing and Analyzing the impact of diversification strategy in manufacturing company. Dangote groups of companies has been selected, been one of the company that diversified into various sectors of the company. This will help and motivate the small medium enterprises to pursue the strategy for survival in business. The product work will also start with the general desc1iption of the study i.e. the main objectives of the research work as well as the hypothesis. Its limitations and scope of the study. The researcher will use both the primary and secondary data available for the work. The collection of the data will be through the use of questionnaires, historical account and interviews. Similarly, effort will be made to point out relevant works that are related to the study which were reviewed with much emphasis on the findings and recommendations of various author. Simple percent will be used for analysis of the finding.