Impact of diversification strategy on performance of manufacturing companies a case study of Dangote group of companies
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Date
2014-10
Authors
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Publisher
Kampala International University, Faculty of Business and Management
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 finn'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
firms 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 tln·ough 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.
Description
A Thesis Submitted to the Faculty of Business and Management in partial fulfilment of the requirement for the Award of a Bachelors Degree of International Business of Kampala International University
Keywords
diversification, performance, manufacturing