DIVERSIFICATION AND PERFORMANCE OF SELECTED PHARMACEUTICAL SHOPS IN ILORIN, KWARA STATE
Keywords:
Diversification, Conglomerate Diversification, Concentric Diversification, Organizational Performance
Abstract
The study examined the effect of diversification onthe performance of selected pharmaceutical shops in Ilorin, Kwara State. A survey research design was adopted for the study. A structured questionnaire was used to collect data for the study. The study adopted the test-retest reliability method and content validity. The population of the study consists of 166 employees from 12 selected pharmaceutical firms.The sample size of 117 was determined by using Yamane’s (1968) sample size determination formula.Findings showed that conglomerate diversification has a positive effect on the performance of pharmaceutical stores (ß = 0.654, 0.000 < 0.05). Concentric diversification has a positive effect on the performance of pharmaceutical stores (ß = 0.216, 0.019 < 0.05).The study concluded that70% of the change in performance of selected pharmaceutical shopswas brought about by the dimensions of diversification. Organizations were recommended to use diversification as a survival strategy to outperform their rivals.
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References
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Syarifuddin, D. (2017) Competitive Advantage on Hotel Industry in Pekanbaru Indonesia Int. Bus. Manag. 11 2 397–406
Ugwuanyi, G. O., &Ugwu, J. N. (2013). The effect of corporate diversification on the profitability of the financial service sector in Nigeria. World Academy of Science, Engineering, and Technology, 6 (7), 1729–1732.
Valis-Boas, R., & Suarez-Gonzalez, I. (2015). Internationalization and organization performance: The S-curve hypothesis under Eurozone context. NuevasTendenciasendireccion De empresas, 15 (7), 1–20.
Wu, B (2013) Opportunity costs, industry dynamics, and corporate diversification: Evidence from the cardiovascular medical device industry, 1976–2004. Strategic Management J. 34(11): 1265–1287
Xaxx, J. (2017). The disadvantage of diversified business. Retrieved from http://www.chronbusiness.chron.com/
Yigit, I., & Tur, S. (2012) Relationship between diversification strategy, application, and organizational performance according to Herfindahl index criteria. Procedia. Journal of Social and Behavioural Sciences, 3 (6), 118–127.
Akewushola, R. (2015). Performance effectiveness and related product marketing diversification strategy in Nigerian companies: Information and communication technology as a virile tool. Journal of Policy and Development Studies, 9 (2), 211–218. (Masinde &Shitseswa, 2013)
Akpinar, O. &Yigit, I. (2016). The relationship between diversification strategy and firm performance in developed and emerging economy contexts: evidence from Turkey, Italy, and Netherlands. 13th International Scientific Conference on Economic and Social Development, Barcelona, 583-592
Alamsyah, D. P., Trijumansyah, A &Hariyanto, O. I. B., (2017) Mediating of Store Image on Customer Trust for Organic Vegetables MIMBAR J. Sos. dan Pembang. 33 (1)
Ayeni, O. (2013). The effects of economic diversification on the development of tourism in Nigeria. American Journal of Tourism Management, 2 (1), 15-21.
Block, J. H, Henkel, J., Schweisfurth, V,.&Stiegler, V. (2016) Commercializing User Innovations By Vertical Diversification: The User-Manufacturer Innovator Res. Policy 45 1 244–259
Castaldi, C., &Giarratana, M. S. (2018). Diversification strategy, branding, and performance of professional service firm. Journal of Service Research, 21 (3), 353–354.
Emel, Y., & Yildirim, B. O. (2016). Industrial diversification and performance in an emerging market. Panoeconomicus, 63 (4), 441–454.
Hannan, M. T, & Freeman, H. (2017) Cascading organizational. Organizational Change.14(5), 463-482.
Hasby, H., Buyung, S., &Hasbudin, S. (2017). The effect of organization size and diversification on capital structure and organization value (study in the manufacturing sector on Indonesia Stock Exchange). The International Journal of Engineering and Science, 6 (6), 50–61.
Hashai, N. (2015). Within industry diversification and firm performance-An S-shaped hypothesis. Strategic Management Journal, 36 (9), 1378–1400
Hurriyati, R. Lisnawati, &Rhamdani, F. (2017) Online Consumer Reviews on Using EShopping Service of E-Commerce in 1st Annual Applied Science and Engineering Conference
Isoraite M. (2018). The competitive advantages theoretical aspects. ECOFORUM, 1(14),
Junior, J. N., &Funchai, B. (2013). The effect of corporate diversification on the capital structure of Brazilian organizations. ReviscaContabilidade&Financas, 24 (62), 154–161.Zheng-fend &Lingyan (2012)
Kafouros, M. Wang, C Piperopoulos, P & Zhang, M. (2015) Academic Collaborations and Firm Innovation Performance in China: The Role of Region-specific Institutions Res. Policy 44 (3) 803–817
Karimi, D.G. (2013). Relationship between investment portfolio choice and profitability of investment companies listed in the Nairobi securities exchange. Unpublished MBA thesis, Kenyatta University.
Makau, M.M., & Ambrose, J. (2018). The impact of portfolio diversification on investment firms’ financial performance in Nairobi Security Exchange Commission, Kenya: Empirical review. International Journal of Management and Commerce Innovation, 5 (2), 177–187.
Manyuru, A., Wachira, M., & Amata, E. (2017). The impact of corporate diversification on organization value in Kenya. African Journal of Business Management, 11 (11), 241–249.
Martínez-Campillo A., (2016). The benefits of related and unrelated diversification strategies in the Spanish context: What is the difference that executive leadership style can make?Leadership, 12 (1), 86-119
Mashiri, E., &Sebele, F. (2014). Diversification as a corporate strategy and its effects on firm performance: A study of Zimbabwean conglomerates in the food and beverages sector. International Journal of Economics and Finance, 182-195.
Mawdsley, J. (2019). Considering a diversification strategy? Follow insights from HEC. Knowledge Article, 1-4
Oh, C. H., Sohl, T., & Rugman, A. M. (2014). Regional and product diversification and the performance of retail multimedia, discussion paper. Henley discussion paper series. Viewed on December 5, 2018, from HTML
Oladimeji, M. S. &Udosen, I. (2019). The Effect of Diversification Strategy on Organizational Performance. Journal of Competitiveness, 11(4), 120–131. https://doi.org/10.7441/joc.2019.04.08
Rishi, M., Rudra, R., & Vinay, N. (2014). Interactive effect of diversification strategy on capital structure and corporate performance: An analytical evaluation. Global Journal of Management and Business Research, 14 (1), 1-9.
Sahu, S. K. (2017). Firm performance and diversification: An empirical investigation of the chemical sector in India. International Journal of Sustainable Economy, 9 (1), 56–71.
Santarelli, E., & Tran, H. (2015). Diversification strategies and firm performance in Vietnam. Economics of Transition, 24 (1), 31–68.
Schommer, M., Richter, A. & Karna, A. (2019). Does the diversification firm performance relationship change over time? A meta-analytic review. Journal of Management Studies, 56 (1), 91–133
Sihite, M. (2018). Competitive Advantage: Mediator of Diversification and Performance IOP Conf. Ser.: Mater. Sci. Eng. 288 012102 (IOP Conference Series: Materials Science and Engineering)
Sindhu, M., Haz, E., Ali, S., & Ali, M. (2014). Impact of diversification on the organization’s performance: An evidence from Pakistan. European Journal of Business Management, 6 (4), 106–111.
Sulaimon, A. A., Ogunkoya, O. A., Lasisi, J. O., &Shobayo, P. B. (2015). The impact of marketing capability and diversification strategy on performance. Journal of Marketing and Consumer Research, 20 (13), 50–59.
Su, W., & Tsang, E. W. K. (2015). Product diversification and financial performance: the moderating role of secondary shareholders. Academy of Management Journal, 3 (2), 1128–1148. (Oladele, 2012)
Syarifuddin, D. (2017) Competitive Advantage on Hotel Industry in Pekanbaru Indonesia Int. Bus. Manag. 11 2 397–406
Ugwuanyi, G. O., &Ugwu, J. N. (2013). The effect of corporate diversification on the profitability of the financial service sector in Nigeria. World Academy of Science, Engineering, and Technology, 6 (7), 1729–1732.
Valis-Boas, R., & Suarez-Gonzalez, I. (2015). Internationalization and organization performance: The S-curve hypothesis under Eurozone context. NuevasTendenciasendireccion De empresas, 15 (7), 1–20.
Wu, B (2013) Opportunity costs, industry dynamics, and corporate diversification: Evidence from the cardiovascular medical device industry, 1976–2004. Strategic Management J. 34(11): 1265–1287
Xaxx, J. (2017). The disadvantage of diversified business. Retrieved from http://www.chronbusiness.chron.com/
Yigit, I., & Tur, S. (2012) Relationship between diversification strategy, application, and organizational performance according to Herfindahl index criteria. Procedia. Journal of Social and Behavioural Sciences, 3 (6), 118–127.
Published
2023-07-13
How to Cite
Adebowale ASAOLU, O., & Livingstone GILBERT, L. (2023). DIVERSIFICATION AND PERFORMANCE OF SELECTED PHARMACEUTICAL SHOPS IN ILORIN, KWARA STATE. GPH-International Journal of Business Management, 6(07), 131-145. https://doi.org/10.5281/zenodo.8141397
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Articles
Copyright (c) 2023 Olalekan Adebowale ASAOLU & Laguo Livingstone GILBERT
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