CORPORATE SURVIVAL AND GROWTH STRATEGIES IN A COMPETITIVE BUSINESS ENVIROMENT A STUDY OF KARRINGTON LIMITED AND ROCANA NIGERIA LIMITED

ABSTRACT

Competition has become the norm of the day in modern economy. Modern business organization does not only compete with local industries but also foreign industries. While on one hand, it has given room to increased varieties of goods available to consumers and improved quality of the products, on the other hand, strive competition has led to the failure of many business enterprises. Consequently, the project examines corporate survival and growth strategies being employed in Karrington Limited and   Rocana Nigeria limited as a printing and advertising company as a case study . In achieving the sole objective of the study, a number of research tools were employed; such as questionnaire, oral and structured interviews where administered on the Direct clients and Advertising agents of the companies. The corporate survival and growth strategies of the companies and their limiting factors were identified. In the implications of the study, the researcher discovered that the growth of the companies can be hinged on the quality control and  modern technology. This  will give  the  companies a competitive hedge over its competitors. The reality of the competition and the need for corporate strategy has been emphasized. The study shows that competition in the modern economy is a reality. Hence, corporate organization should be proactive. They must not allow the competitors to overtake them unaware. The management of the organization must adopt corporate strategy that will position the organization in a place that will be difficult for the competitors to retaliate.

CHAPTER ONE INTRODUCTION

1.1     BACKGROUND OF THE STUDY

Business firms operate in a society to satisfy individual and social needs through the production of goods and services. Their decisions influence and are  influenced by what is  happening in the  society. The social, economic, and political institutions that make up a society constitute in a broad sense the environment of business enterprises and the way they work affects the operations and fortunes of every business unit.

The motivating factor for the entrepreneur to go into business is to make  profit.  The  objective  of  a  business  firm  however  goes  beyond

profitability only. It includes growth in size, increase in market share, innovation, and social objective. The realization of these objectives will be determined largely by the happening in the environment. Specifically, the environment of a  business comprises those activities that can  hinder or facilitate the achievement of its objectives. They include population, technology, social infrastructure, economic system and competitors.

Our focus in this study is on the impact of the activities of the competitors on a business firm. Customers have a choice to go elsewhere if a particular firm’s product or service does not meet their needs. They can go to  competitor who  may claim they can  do  better.  This  means  that  the activities of competitor in the same industrial sector as a company also a lied a firm‘s prospects and operations. The type and quality of products that competitor offer, the prices they charge for their products or services, their sizes, locations, reputation, distribution channels and usual stock level maintained are some of the things about competitors which shape the operations of a business. No business firm can ignore the actions and decisions of its competitors in a modern economy characterized by competitions.

FIERCE BUSINESS COMPETITION IN MODERN ECONOMY:

We operate an open market economy where competitions thrive. Increased competition is being driven by many factors, including the emergence of a global market place, the increase number of firms, new technology that makes it easier for firms to enter new markets, and ever- increasing pressure from s markets to raise shareholders value. In particular the frenetic atmosphere of mergers and acquisitions, couple with the increased number of large institutional investors, has meant that firms that do not cut costs and improve financial performance face swift action in equity markets. This competition has meant that companies are less able to insulate workers or invest in public goods such as research or employee training. For instance, in IJ.S.A, in 1992, three-fourth of 53 I corporations surveyed identified economic pressure from competitors as one of the primary factors motivating their restructuring efforts (National Policy Association, 1997).

In 1965 IBM faced 2,500 competitors for all its markets. By 1992, it faced 50.000.And IBM is not alone in feeling outside pressure. Whole industries that were sheltered from significant competition such as telecommunication now faced growing competition. For instance, NITEL now have an array of competitors in Nigeria telecommunication market such as MTN Telecommunication, V.Mobile, Globacom, Starcomm, Intercellular

etc. Stable industries have become dynamic. For example, insurance was once  a  stable  industry  in  Nigeria  with  a  distribution  system  of  local insurance agents. Now it’s undergoing significant change, with competition emerging from foreign companies, banks selling insurance etc.

Adesina (2003) noted that competition ensures we change our ways of doing  things.  It  ensures  that  we  raise  our  quality  bar  to  international standard. Again it can also he said that fair and equitable competition helps achieve appropriate pricing level.

As a result of fierce business competition in the market, the number of firms being born and dying every year has grown. As less innovative and efficient companies die or contract, more innovative and efficient companies take their place. While firms can grow fast, they can go out of business or downsize lust as quickly.

Moreover, fiercer business competition has meant that companies are constantly  developing  new  products  and  services  in  order  to  gain  new market. Consumer benefit because their needs are more specifically addressed.

Advertising and sale’s promotion play major role in competition in Nigeria. It  can determine the  fortune  of any company.  A company that  fails  to advertise will remain in obscurity and may fund it difficult to grow and

expand. This account for the reason why may multinationals as well as indigenous companies which are regarded as market leaders such as Coca- cola,  Guinness  (Nig)  Plc,  Nigerian  Breweries  Plc,  Nigerian  Bottling company Plc, MTN communications, West Africa Milk Company Plc, First Bank of Nigeria Plc, etc. budget millions of naira annually on advertising and sales promotion.

Many advertising companies and agencies have sprung up recently in Nigeria to meet the challenges in the market. This has also brought competition to  advertising industry itself  Researching therefore  into  the strategies adopted by one of the leading advertising companies in Nigeria to survive  and  grow  is  crucial  considering  the  strategic  roles  play  by advertising and sales promotion in the survival of any company in modern economy.

1.2     STATEMENT OF PROBLEM

The economic circumstances characterize by recession and competition are now threatening the survival of many corporate establishments and such establishment need to wake up from their present state if they must survive in the next millennium. Prior to industrial revolution, producers were regarded as kings and could produce anything since there were ready markets for them irrespective of quality, price etc.

After the industrial revolution however, productivity increased beyond measure and competition become tensed. As a result, the royal crow of producers disappeared forcing them to be at the mercies of consumers. Mere production  of  goods  and  services  were  no  longer  sufficient  to  give  a company a competitive edge over others but polices and strategies put in place to achieve market leadership.

In view of the rigorous competition that has characterized the economic system, it is essential for companies to exploit circumstance and to deal with total actual and potential opportunities. Formulation of policies and strategies that will give them competitive edge has become a must in order to survive. In addition, business activities in the world today take place under conditions of great risk, uncertainties and intense competition. It is no longer possible to rely on an “invisible hand” to regulate business operations and place any firm in a position of relative advantage in the market place.

The greatest challenge for a successful organization is change. Many good idea which products and services should be offered, how they should be produced and delivered has suddenly become obsolete in the face of change. Many organizations find difficult to cope with changing customers need, new technology, innovation etc as a result they fold up or are taken over by more aggressive competitors.

Business failures and near failures are frequent occurrences. Often the plights of a failing firm come as a great surprise to managers and shareholders alike. What may result in constant business failures therefore is inability to recognize opportunities and not so much the non-existence of opportunities in any business line of any sale whatever. Business failures like all mundane failure are never divine.

Therefore in recognition of the above problems, this research has been undertaken to critically look at the causes of business failure and suggest practical  business  strategies  for  survival  and  growth  in  a  competitive business environment in Nigeria.

1.3     OBJECTIVE OF THE STUDY

The objectives of my study are to understand and critically analyze the  corporate  survival  and  growth  strategies  at  Karrington  limited  and Rocana Nigeria limited.

I.        To determine the factors responsible for the growth of a Company

(business firm) in spite of market competition.

2.       Identify the limiting factors hindering the growth of the company in a competitive market.

3.       To   find  out  whether  corporate  survival  and   growth  strategies significantly involves efficient and prompt service delivery.

4.       To determine the effects of modern technology in enhancing corporate survival and growth strategies in a competitive business environment.

5.      To find out whether advertising and sale promotion play a major role

(determines the future of a company) in a competitive market.

6.       To  determine  the  major  roles  played  by  advertising  and  sales promotion in a competitive market.

1.4     RESEARCH QUESTIONS

Research questions for this study are as follows:

           Does the provision of quality service enhance corporate survival and growth strategies in a competitive business environment?

        Do modern technologies enhance corporate growth and survival?

           Do you think advertising and sales promotion play a major role in competitive in Nigeria?

           What are the motivating factors for the entrepreneur to venture into a business?

           To what extent can equitable competition help to achieve appropriate pricing level?

           Do operations in the same industrial sector affects a firms prospects activities?

1.5     HYPOTHESIS OF THE STUDY

Ho:    Corporate survival and growth strategies do not significantly involve ensuring the provision of quality service.

Hi:     Corporate   survival   and   growth   strategies   significantly   involve ensuring the provision of quality service.

Ho:    Corporate   growth  and   survival  strategies   are   not   significantly enhanced with the use of modern technology.

Hi:     Corporate growth and strategies are significantly enhanced with the use of modern technology.

Ho:    The growth and survival of a company cannot be achieved through the enhancement of its competitive strategies.

Hi:     The growth and survival of a company can be achieved through the enhancement of its competitive strategies.

Ho:    Profit making as one of the motivating factors cannot be a determinant for an entrepreneur to venture into a business.

Hi:     Profit making as one of the motivating factors can be a determinant for an entrepreneur to venture into a business.

Ho:    Equitable competition in a growth and survival of a company cannot help to achieve appropriate pricing level.

Hi:     Equitable competition in a growth and survival of a company can help to achieve appropriate pricing level.

Ho:    The operations of competitors in the same industrial sector cannot have a positive effect on the firm’s prospects and activities.

Hi:     The operations of competitors in the same industrial sector can have a positive effect on the firm’s prospects and activities.

1.6    SIGNIFICANCE OF THE STUDY

This study is aimed at achieving the following goals:

I.       To enlighten the corporate organizations on the reality of competition in the modern world.

2.       To spur the management of corporate organization on the need to be proactive and not reactive to competitors actions and decisions.

3.       To assist organizations that have lost significant market shares to competitors on how to recover it back.

4.       To assist new business firm confronted with intense competition from the established firms on how to survive and grow in the midst of competition.

5.       To reduce the rate of business failure due to competition in Nigeria.

6.       To  expose  the  entrepreneur  to  alternative  survival  and  growth strategies aimed at improving the profitability and stability of establishment.

1.7   SCOPE OF THE RESEARCH

The  scope of the  study covers the  corporate survival and  growth strategies in a competitive business environment. In order to have a more empirical analysis of the work, this study shall be limited to Enugu area (Karrington limited and Rocana Nigeria limited) .Data shall be collected from   Karrington  limited   to   arrive   at   a   tenable   and   comprehensive conclusion. Our focus shall be the printing and outdoor advertising in Nigeria.

The attitude and compliance disposition of the current management of our studied company to an extent represents the industry.

1.8    PROFILE OF SELECTED COMPANIES

1.8.1 COMPANY PROFILE OF   KARRINGTON LIMITED

Karrington Limited was incorporated in 1988 with the principal objective of meeting the increasing demands from advertisers throughout the country and West Africa sub region, for high quality, innovative printing and communication services. Its head office is located in Lagos. The company has staff strength of over 500 employees. It commenced operation in 1988 with lithographic and color separation. It later diversified into outdoor advertising and large format printing. The company enjoys the patronage of most of the well-known multinationals in Nigeria. This includes Chevron

Texaco Plc,  Guinness Nigeria  Plc,  MTN  Telecommunication, V-mobile, West African Milk Producing Company Plc, Nigerian Bottling Company Plc, Nigerian Breweries Plc, etc.

VISION

The vision of Karrington company is to become a foremost professional service provides within West Africa sub-region through excellent quality printing that are world class, bearing in mind their customers’ needs and the ever changing environment, contributing into building a virile and dynamic printing and advertising communication company through the of latest technology. Karrington Limited was licensed as printing and advertising Communication Company. Raw materials for the printing are both locally and internationally. Their technical partners include:

   GSW (PTY) Limited, South Africa.

   Impression screen Limited, South Africa

   Outline Limited, South Africa.

THE MISSION STATEMENT:

   To be a market leader in all we do.

     To  public  –  a  foremost  professional service  provider  that  creates public awareness. A service company that ensures quality and timely delivery.

     To board of directors -a prime and profitable investment, a pride to win.

     To  employee  place  of  pride  to  work.  A  pleasant  and  conducive working environment. That  in  addition regards  merit,  ensures  the realization of full potential, as well as engenders ownership approach to duty.

   To society -a responsible corporate citizen.

1.8.2       COMPANY PROFILE OF ROCANA NIGERIA LIMITED

Rocana Nigeria limited is the foremost outdoor advertisement production and printing firm based in south-east Nigeria. We are unequalled in our response to all out door advertisement and printing need with exceptional QUALITY, friendly customer care and unbeatable pricing. Rocana Nigeria limited started in 1971 with three (3) persons and very few clients, but  today we  have over 76  staff and  numerous clients. Rocana Nigeria limited was incorporated in 1975. We have our head office and factory located at plot 37/38 Emene industrial layout, Enugu with an outlet office at no 17 olaide street ,ikate,Surulere, Lagos. For over 35 years Rocana Nigeria limited has been into general outdoor advertising production, commercial printing services moving along with the taste in signs of the times.

VISION

To be the most effective outdoor advertising production and printing shop in Nigeria,   to   remain   unbeatable   in   speed,   quality  and   client   service relationship.

MISSION

Rocana Nigeria limited remain unequalled in her response to all outdoor advertising and printing needs, with an unbeatable quality, handles with friendliness, Employing state-of –the art technology to achieve customer satisfaction at all times.

PROCESSES

We are a process centric organization, constantly striving to set new bench markings in customer satisfaction and operational excellence. Quality consciousness permeates throughout our organization and quality procedures form an intricate part of our production process. Our internal processes and workflow  are  aligned  to  supportively  achieve  a  consistent  standard  of quality, we looking not at what we do but how we do it as well.

PEOPLE

Chairman/Chief Executive Director, Robert Orji established Rocana Nigeria

Limited in 1971.for over thirty –eight years; he has been in the business of

signs,  general  outdoor  advertising,  designing  and  printing,  engraving production of advertising materials and public relations.

MRS. UCHECHUKWU E. J ORJI

Mrs. Uchechukwu E.J Orji joined Rocana Nigeria limited in 2006.She is the Executive Director of Rocana Nigeria Limited. She sees to the smooth running of the Company’s business in absence of the chief Executive officer, she holds a masters in marketing communication from the United Kingdom and certificate in advertising.

1.9   DEFINITION OF KEY TERMS CORPORATE.

Corporate means relating to business corporations or to a particular business corporation

SURVIVAL

If you to the survival of something or someone, you mean that they manage to continue     or exist in spite of difficult circumstances.

GROWTH.

The growth of something such as an industry, organization, or idea is its development in size, wealth, or importance.

STRATEGIES

A strategy is a general plan or set of plans intended to achieve something, especially over a long period.

BUSINESS ENVIRONMENT

The term business environment is composed of two words ‘Business’ and

‘Environment’. In simple terms, the state in which a person remains busy is know as business .The word Business in it’s economic sense means human activities like production, extraction or purchase or sales of goods that are performed for earning profits.

CORPORATE STRATEGY

This is defined as the determination of the business in which a company will compete and the allocation the resources among the business.

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