Diversification in Business and It's Economic Importance to SME's in Nigeria
Ajueyitsi, Oghenetega; Ajueyitsi, Tega (2024)
2024
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Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-2024053119145
https://urn.fi/URN:NBN:fi:amk-2024053119145
Tiivistelmä
This study investigated the economic importance of diversification for SMEs in Nigeria. It recognised the potential relevance of diversification strategy in business and investigated the impact on SMEs due to the gap identified in this area.
The study was based on a qualitative research method and collected data from 5 businesses. The data collection method was an in-depth interview, which was used to gather as much relevant information as possible to draw reliable conclusions.
The study found that most SMEs are motivated to diversify because of the inflationary environment in the country and the economic instability, with the ultimate goal of bolstering their revenues. In their strategy, it was found that most businesses employed the unrelated diversification strategy to keep the business afloat. Moreover, it was found that most of them are affected by the common SME challenge, which is financial constraints, and most do not have a risk management strategy in place. Consequently, this led to the conclusion that diversification is beneficial to Nigerian SMEs; however, each business needs to employ a risk management strategy to ensure the success of this strategy in the long term.
The study was based on a qualitative research method and collected data from 5 businesses. The data collection method was an in-depth interview, which was used to gather as much relevant information as possible to draw reliable conclusions.
The study found that most SMEs are motivated to diversify because of the inflationary environment in the country and the economic instability, with the ultimate goal of bolstering their revenues. In their strategy, it was found that most businesses employed the unrelated diversification strategy to keep the business afloat. Moreover, it was found that most of them are affected by the common SME challenge, which is financial constraints, and most do not have a risk management strategy in place. Consequently, this led to the conclusion that diversification is beneficial to Nigerian SMEs; however, each business needs to employ a risk management strategy to ensure the success of this strategy in the long term.