GROWTH STRATEGIES AND CORPORATE SURVIVAL OF SELECTEDMONEY DEPOSIT BANKS IN ENUGU METROPOLIS, ENUGU STATE, NIGERIA
CHAPTER ONE
INTRODUCTIONÂ
1.1Â Â Background of the Study
The business environment of the 21st century has been more volatile and challenging than earlier centuries (Onodugo and Ewurum, 2013). Zuzana (2006) asserts that today’s organizations have to deal with dynamic and uncertain environments. In order to be successful, organizations must be strategically aware of the changing environment. They must understand how such changes in their competitive environment are unfolding. They should actively look for opportunities to exploit their strategic abilities, adapt and seek improvements in every area of the business, building on awareness and understanding of current strategies and successes. Organizations must be able to act quickly in response to opportunities and barriers (Pearson, 1990; Robbins and Stuart-Kotze, 1990). In a hyper-competitive environment, companies must continually improve their people, processes, and technologies to create a competitive advantage. The ability to accurately predict consumer demand in addition to the capability to rapidly react and readjust to environmental changes, supply and demand fluctuations; separates the winners from the losers (Rai, 2005).
Jonathan (2011) submits that in this highly competitive environment at present, businesses are always coming up with new ideas that turn markets upside down. Hence organizations’ management are put under pressure not only to sustain current trading performance but to improve it through increased margins, reduced costs and greater market share. Too often, companies employ strategies to exploit external opportunities rather than first looking internally to see what operational inefficiencies are there to be improved. Business firms operate in a society to satisfy individual and societal needs through the production of goods and services. Their decisions 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 affect the operations and fortunes of every business unit.
The motivating factor for the entrepreneur to go into business is to make profit. The objectives of a business firm, 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 events in the environment. Specifically, the environment of business comprises those activities that can hinder or facilitate the achievement of its objectives. They include population, technology, social infrastructure, economic system and competitors. To this end, this study focuses on the impact of the activities of the competitors on a business organization, its survival and growth strategies adopted.
Customers have a choice to go elsewhere if a particular firm’s products or services do not meet their needs. They can switch brand and patronize a competitor who may claim to provide a better product or service. This means that the activities of the competitors in the same industrial sector may invariably affecta firm’s prospects and operations. The type and quality of product that competitors offer, the prices they charge for their products or services, their size, locations, reputation, distribution channels and usual stock level are some of the things about competitors which shape the operations of a business. No organization can ignore the actions and decisions of its competitors in a modern economy characterized by competition.
Nigeria operates an open market economy where competitions thrive. Increased competition is being driven by many factors, including the emergence of a global market place, the risein the number of firms, new technology that makes it easier for firms to enter new markets and ever- increasing pressure from markets to raise shareholders’ value. In particular, the frenetic atmosphere of mergers and acquisitions, along with the increased number of large institutional investors, imply that firms which do not cut costs and improve financial performance face swift action in equity markets. This also indicates that such companies are less able to insulate workers or invest in public goods such as research or employee training. For instance, in the United States of America, three-fourth of 531 corporations surveyed, identified economic pressure from competitors as one of the primary factors enhancing motivation in their organizations (Cappelli, 2003).
