research work investigates the impact of corporate strategy on investment
decision in Nigeria. Effective corporate strategy plays a critical role in
defining the businesses in which a company will compete, preferably in a way
that focuses resources on how to convert distinctive competence into
competitive advantages. The broad objective of the study is to investigate
whether Cadbury Nigeria plc strategic pattern affects the company’s expansion
investment decision and also to investigate how strategic pattern shows the
growth and profitability of a firm that is increase in sales and market value.
The primary source of data collection was used where stratified questionnaires
were distributed to respondents. The simple random sampling technique was used
to select a sample size of 50 personnel. The chi-square statistical tool was
used to test the stated hypotheses and the findings revealed that the Net
profit margin, measures the overall firm’s ability to turn each naira sales
into profit. The study concludes that corporate strategy affects expansion
investment decisions of organizations, i.e. strategic pattern affects the
company’s expansion investment decision. The study recommends among others that
management should reinforce the need for a strategic framework for problem
solving under complexities and the relevance of strategic considerations in
TABLE OF CONTENTS
of Contents vi
One: Introduction 1
Background to the Study 1
Statement of Problem 5
Research Questions 6
Objectives of the Study 6
Statement of Hypotheses 7
Significance of the Study 8
Scope of the Study 8
Limitations of the Study 9
Definition of Terms 9
Chapter Two: Review of
Related Literature 11
2.2 Definition of Strategy 11
of Corporate Strategy 16
of Investment Decisions 21
of Expansion Investment Decisions 25
of Investment Decisions 25
Reasons for Corporate Strategy 27
that Account for a Successful Strategy 34
corporate strategy fails 38
Corporate Strategy of Cadbury Nig Plc 40
Expansion Investment Decisions 43
Chapter Three: Research
Method and Design 45
Research Design 45
Description of Population of the Study 46
Sample Size 46
Sampling Techniques 46
Sources of Data Collection 46
Method of Data Presentation 47
Method of Data Analysis 47
Chapter Four: Data
Presentation, Analysis and
Presentation of Data 49
Data Analysis 49
Hypotheses Testing 57
Chapter Five: Summary
of Findings, Conclusion
Summary of Findings 62
1.1 Background to the Study
is glaring that investment decisions without a sound corporate strategy is like
a ship without a rudder and a waste of time no wonder said that allowing
resources to investment without a sound concepts to divisional aid corporate
strategy is a lot like throwing darts in a darkroom. Investment decision which
involves a firm’s decision to invest its current fund most efficiently in the
long-term assets in anticipation of an expected flow of benefit over a series
of years include: expansion acquisition, modernization and replacement of the
long term assets, sales of a division or business (divestment), change in the
method of sales distribution advertisement campaign, research and development
programme etc needs a well formulated strategy.
well formulated strategy help to marshal and allocate an organization resources
into a unique and viable posture based on its relative interval competences and
short comings anticipated changes in the environment and the contingent moves
by intelligent opponent. Therefore, this study is aimed at focusing on the
impact of overall corporate strategy on investment decisions in Nigeria with a
particular emphasis on Cadbury Nigeria Plc to highlight the effective and
efficient attainment of investment decisions of an organization particularly on
expansion in achieving a sustainable competitive advantage capital efficiency
and profitable long term growth and wealth maximization of shareholders.
strategy is the pattern of decision in a company that determines and reveals it
objectives, purposes or goals, produces the principal policies and plans for
achieving this goals and defines the ranges of business the company is to
pursue, the kind or economic and human organization it is or intend to be and
the nature of the economic and non economic contribution it intends to make to
its shareholders, employees, customers and communities.
corporate strategy plays a critical role in defining the businesses in which a
company will compete, preferably in a way that focuses resources on how to
convert distinctive competence into competitive advantages. It also means an
ineffective corporate strategy will affect the overall performance of the
organization particularly the firm’s investment decision since it the primary
driven force (Verrechia, 2005), organization must therefore formulate a
strategic decision that will determine the overall direction of the firm major
goals, policies and action sequences into a cohesive whole.
becomes a matter of great concern to management because any wrong step taken
with a view of addressing any of the above taken will adversely affect the
smooth running of the organization for instance, the huge amount of capital
tied up in long term assets in anticipation of the expected cash flow over a
series of years that is irreversible and even if reversible at substantial loss
could be committed to other profitable venture within a short period that will
yield quick return. The internal and external environment trends that gives the
firms its identity. Its power to mobilize the strength and likelihood if
success in the market place may crystallize to formless reality of loss of
sustainable competitive advantage, superior skills, superior position and
resources. As Charles Dawin said that it is not the strongest of the series
that survive or the most intelligent, but the one most responsive to change. In
the same way, if manager do not evaluate their resources in relative to
competitor’s strategy there will be no superior return over long term on
investment (expand) and shareholders values, growth and competitive advantage
a lot of emphasis has been placed on the view that a business firm facing a
complex aid changing environment will benefit immensely in terms of improve
quality of decision making if capital budgeting decisions are taken in the
complex of its overall corporate strategy. This approach provides the decision
making if capital budgeting decisions are taken in the complex of its overall
corporate strategy. This approach provides the decisions maker with a central
theme or a big picture to keep in mind at all times as a guideline for
effectively allocating corporate fimucia1 resources.
Statement of Problem
practice of corporate strategy in relation to investment decision by business
organization in Nigeria is a new phenomenon; however, it is self evident that
no individual firm is problem free. The problem to be addressed is; the effect
of strategy on the firm’s investment decision particularly on the area of
expansion. How strategic pattern shows the growth and profitability of a firm.
From various business reviews, management and accounting literatures read and
discover more problems like: What should we expand on or acquire within our
core competences and resources at hand? And what are the approach to allocating
investment capital and resources within the context of the interval and
external environment trends.
1.3 Research Questions
Does Cadbury Nigeria plc strategic
pattern affects the company’s expansion investment decisions?
How does strategic pattern shows the
growth and profitability of a firm?
are the approach to allocating investment capital and resources within the context
of the internal and external environment trends?
Objective of the study
objective of the study in line with the stated problems are:
To investigate whether Cadbury Nigeria
plc strategic pattern affects the company’s expansion investment decision.
To investigate how strategic pattern
shows the growth and profitability of a firm that is increase in sales and
To investigate what approach of
allocating investment capital and resources within the context of the internal
and external environment.
1.5 Statement of Hypothesis
line with the objective of the study, the researcher tested this hypothesis:
HO: Cadbury Nigeria Plc strategic
pattern does not affect the company’s expansion investment decisions.
Cadbury Nigeria plc strategic pattern
affects the company’s expansion investment decisions.
Strategic pattern does not show the
growth and profitability of a firm.
HI: Strategic pattern shows
the growth and profitability of a firm.
Allocating investment capital and
resources has no negative influence on internal and external environment.
capital and resources has negative influence on internal and external environment.
Significance of the study
significance of the study lies in its ability to unveil the benefit of
corporate strategies to managers and the need to adopt a more rational approach
to investment decisions in the complex and changing environment where the firm
exist rather than adhering to the traditional methods which is more or less a
rule of thumb before committing the scarce resources of an organization to a
decision which once taken and committed is irreversible.
the general public, the study will serve as an eye opener to them on the
importance of corporate strategy as they prepare to venture in any investment
To this, researcher the project provides an understanding and “broad insight”
to appreciate corporate strategy. The research also equips with the art and
science of carrying out a similar or more complex research in the future.
research work is design to focus on the impact of corporate strategy on
investment decisions of organization. With particular emphasis on expansion
decisions, other variables held constant. Cadbury Nigeria plc will be used as a
case study, focusing on a five year financial summary of the company from 2011
of the study
researcher faces a number of challenges in the effort to carry out a sound
survey among, which include:
Inability to obtain necessary
information due to administrative bottleneck, couples with the fact that some
information were considered as confidential those do not encourage sound
Time and finance, among other
constraint hindered the researcher from doing a more thorough and rigorous work.
1.9 Definitions of terms
1. Strategy: it
is the pattern or plan that integrates an organization’s major goals, policies
and action sequence into a cohesive whole.
2. Company Strategy: It is the game plan
management is using to stake-out a market position conduct its operations,
attract and please customers, compute successfully and achieve organizational
objectives strategy entails managerial choices among alternatives and signals
organizational commitment to specific markets, competitive approaches and ways
3. Investment Decision: Investment
decisions are generally known as the capital
budgeting or capital expenditure decision. It may be defined as the firm’s decision to invest its
current funds most efficiently in the long term assets in anticipation of an expected flow of benefits
over a series of years.
is pattern of decision in a company that determines and reveals its objectives,
purposes, goals, produces the principal policies and plans for achieving these
goals and defines the range of business the company is to pursue to kind of
economic and human organization it is, or intends to be and to make to its
shareholders employees, customers and communities.