EFFECT OF STRATEGIC MANAGEMENT ON PRODUCT LIFE CYCLE IN FOOD AND BEVERAGE INDUSTRIES NIGERIA (A CASE STUDY OF CADBURY NIGERIA PLC)
1.1 BACKGROUND OF THE STUDY
The modern business manager operates in a dynamic environment. The change in the environment has been rapid and unpredictable. Economic variables have been complex both inform and impact on business practices. Consumers and clients have been showing complex behaviours both in local and international markets. The most dramatic change as observed by Aluko et al (2015) is that exhibited by competitive pressures. Competitors have been applying one strategy or the other to adapt to the dynamic and unpredictable business environment. Weakness in competitive practice can be observed in any aspect of business operation. Among consumer goods manufacturers, such weakness can be shown inform of outdated or obsolescent products. No matter the form of competitive weakness, the inability of the company to adapt to changes in its environment results in a very serious problem, which could be decline in productivity or outright collapse of the business (Griffen, 2013). The sheer rapidity of competitive change in the contemporary manufacturing industry in general, requires greater organizational adaptability. There is increasing complexity as well as accelerating rate of change in environments, and there is the conviction that the future of environment is unpredictable. Increasingly, the rational strategies of planned-innovation and long-range planning are being undermined by unpredictable changes. The effectiveness of long-range planning in the light of frequent failures may be questioned. The rapidity and complexity of change may exclude effective long-range planning (Aluko et al, 2015). The success of any strategy depends on the strength of the competitive analysis on which it is based. The particular structure of business competition is made considerably more complex and flexible by the existence of a common medium of exchange. This is the basis for the importance of marketing in the existing business environment (Jones, 2015). The medium of exchange (money) can be for a multiplicity of resources required. Revenue generation makes marketing a critical subsystem of the system of business competition. The analysis of a given market situation beings with the identification of the unique advantage of that business, this requires the identification of specific competitors who act as constraints to organizational goals. Progress will be made by increasing organizational ability to adapt and integrate concepts of competitive system dynamics in order to design efficient and effective strategy for competitive operations (Stable and Grigshy, 2017). According to Henshaw and Smith (2012), different industries offer different competitive opportunities, and as a result, successful adaptation to competitive environment varies from one industry to another. Competitive advantage is built on the ability to utilize the business systems to provide customers and clients with the desired value at the lowest cost. However, not all business systems offer the same potential to build competitive advantage. In addition, their choice is affected by the stage of development of the industry as well as the action of other competitors. Hoffer (2013) affirmed that the key to survival by consumer goods manufacturers in modern competitive business environment lies in having clearly defined objectives, and having efficient and effective practices to achieve set objectives. The business strategist is therefore expected to study the nature of competition in the industry, understand the strengths and weaknesses of his organization, and develop programmes that can put his organization in a more competitive advantage. Establishing competitive advantage can take many forms such as market development, product development, geographical expansion, and rational use of the marketing mix variables (Biggadike, 2015). Market changes and new forms of competition have led to impressive growth and performances for those firms were management has incorporated strategic concepts and analyses into business strategy development and implementation (Porter, 2013). It should be particularly noted therefore that strategic management is essential to corporate survival and growth in the rapidly ever-changing business environment. According to Eniola & Ektebang (2014) businesses that fail to drive good planning practices and tools forward, will not only stay bound by slow, stovepipe planning processes, but also find it difficult to compete in good conditions. The survival-base theory also calls for every business manager to keep in mind the need to be strategic if they do not want their organizations to be crushed by competitors. Strategy is about achieving competitive advantage through being uniquely different in your industry (Porter, 2013; Adeyemi, Isaac & Olufemi, 2017). It is no longer competing for product leadership, rather competing in core competence leadership (Agha, Alrubaiee & Jamhour, 2011). Agha et al. (2011) further argues that defining core competences amid the formulation of strategies is intentionally to attain sustainable competitive advantages. Strategic management is thus a veritable tool in improving firms' competitiveness, performance level and structural development (Makanga & Paul, 2017). Branislav (2014) stated that the application of strategic management practices helps firms in exploiting and creating new and different opportunities for tomorrow. Therefore to straighten up operations and enable firms have vision and direction, strategic management is a route that is highly demanded (Ahmed & Mukhongo, 2017). This is because it provides an overall direction to an enterprise in the setting of objectives, in developing of long-term policies and plans designed to achieve these objectives and then in allocating resources to implement the plans (Abosede et al., 2016). Hence, there is a need for proper planning of the products to ensure that consumers are well satisfied and also the study focused on the need for proper product planning and development to management. Low product planning can be used to prevent product failure by ensuring management efficiency. If efficiency is achieved in the management effort of the organisation, the rate of product failure will be brought to the barest minimum (Azu, 2014).
1.1 STATEMENT OF PROBLEM
The major problem of product life cycle has to do with inefficiency of the executive, which make it difficult to achieve success in the various stages of the life cycle curve. So many products have died before they were being launched into the market because of the poor introduction of marketing strategies. Therefore, a lot of companies are into debt to remain in operation. These are the alleged problems observed in this research work; the firm have not been conducting proper and through market research before and after development of its product, there is inability of the firm to have a close monitoring of the stages of its product in the product life cycle, there is lack of affective and suitable application of marketing programmes at each stage of its product in the product life cycle to enable Cadbury achieve its sales performance, Producers are no longer interested in marketing profitability or profitable sales through satisfying customer's needs, but they are only interested on marketing high profit which consequently has lead to inflection as one of the major problems facing product survival within the business world. Irregularity like bribery and corruption practices, blackmailing so as to gain large market share between companies and competitors, companies no longer use quality and efficient service delivery to gain large market, but instead they use obsolete equipment in providing services which result into poor service delivered at an exorbitant price all in the bide to make high profit, therefore, this project will look at the effective way of applying the marketing strategy to gain good and healthy result on the cycle of a product, and also it will highlight the impact the concept has made in food and beverage industries in Nigeria especially in Cadbury Nigeria plc.
1.3AIMS OF THE STUDY
The major purpose of this study is to examine the effect of strategic management on product life cycle in food and beverage industries in Nigeria. Other general objectives of the study are:
1. To examine the extent to which strategic management is practice by food and beverage firms in Nigeria
2. To examine the effect of strategic management on the performance of Cadbury Nigeria plc organization activity
3. To examine the effectiveness of strategic management on the various stages of product life cycle in Cadbury Nigeria plc
4. To assess the importance of effective application of marketing strategies to product life cycle
5. To find out whether there is relationship between strategic management and product life cycle of Cadbury Nigeria plc.
6. To recommend a more effective and efficient way of maintaining a leadership position using a product life cycle analysis after thorough examination of the prevailing situation.
1.4 RESEARCH QUESTIONS
1. To what extent is strategic management practiced by food and beverage firms in Nigeria?
2. What is the effect of strategic management on the performance of Cadbury Nigeria plc organization activity?
3. How is the effectiveness of strategic management on the various stages of product life cycle in Cadbury Nigeria plc?
4. What is the importance of effective application of marketing strategies to product life cycle?
5. Is there a relationship between strategic management and product life cycle of Cadbury Nigeria plc?
6. What is the more effective and efficient way of maintaining a leadership position using a product life cycle analysis after thorough examination of the prevailing situation?
1.5 RESEARCH HYPOTHESES
H0: There is no significant effectiveness of strategic management on the various stages of product life cycle in Cadbury Nigeria plc
H1: There is a significant effectiveness of strategic management on the various stages of product life cycle in Cadbury Nigeria plc.
H0: There is no significant relationship between strategic management and product life cycle of Cadbury Nigeria plc
H1: There is a significant relationship between strategic management and product life cycle of Cadbury Nigeria plc
There is a significant effectiveness of strategic management on the various stages of product life cycle in Cadbury Nigeria plc
1.6 SIGNIFICANCE OF THE STUDY
This research on the analysis of the marketing effects of product life cycle in the offering of the Cadbury Nigeria Plc is very significant to the company due to the fact that Cadbury Nigeria Plc is large organization that occupies a sizable portion of the entire detergent industry. Besides, it will assist the company have a competitive advantages over other detergent firms as the degree of competitive performance or other brands are observed in the market, it will also help to guide against harm.
Moreso, the research is significance in such a way that it will be of great benefits to student who are interest in the concept of product life cycle, consumer who would want to have knowledge about the product and management of Cadbury Nigeria Plc since we believed that in any field human endeavour, improvement are achieve by learning about what people do. How they do them, with what effect (positive or negative) and possible need for adjustment.
Practitioners of marketing will benefits immensely in the work since the interview and questionnaire will be administered to field staff, wealth of experiences are embraced in the data collected, analyzed and presented. Finally, the study shall encourage future researcher to carry out more studies in the same area.
1.7SCOPE OF THE STUDY
The study is based on the effect of strategic management on product life cycle in food and beverage industries in Nigeria, a case study of Cadbury Nigeria Plc.
1.8 LIMITATION OF STUDY
Financial constraint- Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).
Time constraint- The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.
1.9 DEFINITION OF TERMS
Marketing: This is the conscious human input in the process of exchange relation that identifies the needs and wants of part to the exchange for the mutual satisfaction of the parties.
Product Life Cycle: This represents the unit sales trend or curve from the time it is first placed to the market until it is phased out.
Commercial Life: This is the length of time between commercial birth and commercial death.
Commercial Death: This occurs when the product achieves a certain specified sales volume.
Catalogue Life: This is the length of time the product is carried in the catalogue.
Product Modification: This involves changing one or more of a product characteristic either by adding quality function or style.
Product: This refers to anything of value offered to the market for attention, acquisition and consumption and is capable of satisfying human need and wants.
Company Growth: This is one of the most important reasons for new product development it refers to company expansion either by increasing sales and then achieving product.
Price: This refers to the value attached to the product.
Promotion: This refers to making the product known to the market.
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