Assessing the effect of diversification strategies on organizational performance of beverage companies in South East Nigeria
DOI:
https://doi.org/10.51594/gjabr.v3i12.173Abstract
This study examined the effect of diversification strategies on the organizational performance of beverage companies in South East Nigeria. Specifically, it assessed the effect of horizontal, vertical, and concentric diversification on firm performance. A cross-sectional survey research design was adopted, targeting a population of 523 employees, from which a sample of 227 respondents was selected using stratified random sampling. Data were collected through structured questionnaires measured on a five-point Likert scale and analyzed using descriptive statistics and multiple regression analysis. The results revealed that all three diversification strategies positively and significantly influenced organizational performance, with concentric diversification demonstrating the strongest effect (β = 0.775, p < 0.05), followed by horizontal diversification (β = 0.189, p < 0.05) and vertical diversification (β = 0.096, p < 0.05). The findings suggest that beverage companies can enhance performance by expanding into related business areas, adopting horizontal product line expansions, and integrating supply chain activities. The study concludes that diversification is a critical strategic tool for achieving sustainable growth and competitiveness in the beverage sector. Recommendations include prioritizing concentric diversification, cautiously implementing horizontal diversification, and strategically engaging in vertical integration to strengthen operational efficiency and market performance.
Keywords: Diversification Strategies, Organizational Performance, Horizontal Diversification.
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