SUSTAINING NIGERIAN FIRMS THROUGH STRATEGIC ALLIANCE IN THE EMERGING COMPETITIVE BUSINESS ENVIRONMENT ( A CASE STUDY FEDERAL UNIVERSITY OF TECHNOLOGY YOLA)

CHAPTER ONE 

INTRODUCTION 

1.1  Background of the study 

Joint venture is a popular strategy used by two or more companies to capitalize on opportunity or to minimize threat. It is a strategy that allows companies to put their resources together in order to achieve their strategic objectives. International joint venture involves two or more companies that put their stock and/or other resources together in an agreed percentage to establish a subsidiary company in a foreign country. This strategy is used when the distinctive competencies of the two or more companies concerned complement each other (Aloko, Odugbesan, Gbadamosi and Osuagwu, 1997). On the other hand, strategic alliance is where two or more companies come together to share resources and activities together, in order to pursue a strategic objective. This option might be resorted to due to a number of reasons which include; high cost or capital requirement for the resources concerned, environmental factor, legal requirement, technical expertise required by the resources, and so forth. In Nigeria, strategic alliances have become popular as a means of surviving the ever complex environment. Its uses cuts across sectors of the Nigerian economy; banking, oil, Manufacturing, to mention but a few. Joint venture and strategic alliances have existed in Nigeria since early 1980s. 
However, the two strategies became more obvious in recent years due to the eects or pressure of globalization on local firms, unfavourable rivalries among firms, global economic meltdown and lately, minimum capital requirement as demanded by regulatory authorities. For instance, the Nigerian Central Bank request for a minimum operating capital of 25 billion naira for Commercial Banks operating in Nigeria in 2005 led to a number of strategic alliances and joint venture of a number of Banks. However, while some joined their capital and formed brand new Banks, some acquired others, while the remaining formed strategic alliances. Some international business literature argued that there are benefits for companies that engage in strategic alliances. These benefits according to them include: higher return on equity, investment and improve effectiveness of the firms in the strategic alliance. 

1.2  Statement of the Problem 

A number of organizations across the world today are either dead completely or operating below their normal capacities due to some or most of the following challenges: cross border market penetration challenges; the challenges of raising adequate capital to acquire enough operational assets, competition among firms producing similar product and in the same market, while others are faced with vertical and/or horizontal integration challenges to minimize operational expenses that accrues to firms that are into strategic alliances. In Nigeria, the major problem asides competition facing most firms across the sectors of the economy is the minimum capital requirements as set by the regulating bodies. For instance, in 2005 the Central Bank of Nigeria fixed Twenty-five Billion naira (N25b) as the minimum acceptable capital for any commercial bank that must operate in Nigeria. The policy brought a number of them into forming strategic alliances, while those that could not were either acquired by others or went into liquidation. 

1.3  Objectives of the Study 

This research work titled “Sustaining Nigerian firms through strategic alliance in the emerging competitive business environment with particular reference to Federal University of Technology Yola. The specific objective of this research works includes the following; 
1. To examine the effect of strategic alliance on the development of Nigerian firms. 
2. To evaluate the relevance of strategic alliance on the performance of Nigerian firms. 
3. To ascertain the correlation between strategic alliance and the development of Nigerian economy.
4. To identify the challenges of strategic alliance in Nigeria and also proffer possible solutions to the problems identified. 

1.4  Research Questions 

1.To what extent does strategic alliance affect the development of Nigerian firms? 
2. How relevant is strategic alliance on the performance of Nigerian firms. 
3. Is there any correlation between strategic alliance and the development of Nigerian economy? 
4. What are the challenges of strategic alliance in Nigeria? 

1.5  Research Hypotheses

Ho: Strategic alliance does not have any effect on the development of Nigerian firms. 
H1: Strategic alliance has significant effect on the development of Nigerian firms. 
Ho: There is no correlation between strategic alliance and the development of Nigerian economy. 
H1: There is significant correlation between strategic alliance and the development of Nigerian economy. 

1.6  Significance of the study 

This research work will be of immense help to the researcher as it will help him to know more on Sustaining Nigerian firms through strategic alliance in the emerging competitive business environment. It will also be of great importance to Nigerian firms as it will enrich their knowledge on the benefits and usefulness of strategic alliance. This study will be of great importance to the students and other researchers since it will serve as a reference point for the upcoming researchers.

You May Also Like

COMPARATIVE STUDY OF SOME WATER QUALITY PARAMETERS OF SELECTED PONDS AND RIVER BENUE

Water is one of the most abundantly available substances in nature and also called elixir of life. It plays an important role in the wealth of a nation, particularly like Nigeria, which is predominantly an agricultural economy. The importance of water for the existence of life need not be over emphasized. Water is a simple chemical compound composed of two atoms of hydrogen and one atom of oxygen which bond covalently to form one molecule. It is known as the most complex of all the familiar substances that are single chemical compounds. Water resources of the earth are part of a finite close system and the water reservoirs from time immemorial had an aesthetic appeal, and helped in aquaculture. Water quality parameters are the chemical, physical and biological properties of water, suitable for intended use as it is applicable in aquaculture. Efficient feed conversion, growth and marketability of the final product cannot occur unless the pond system is balanced or in harmony with nature. Therefore the overriding concern of the fish culturist is to maintain, ‘balance’ or ‘equilibrium conditions’ with respect to water chemistry and its natural consequence. The water samples were analyzed for various parameters in the General purpose laboratory, department of fisheries and aquaculture university of agriculture Makurdi, Various water quality parameters like Temperature, pH, Turbidity, Total Suspended Solids (TSS),  Biochemical Oxygen Demand (BOD), Dissolved Oxygen (DO),  and electrical conductivity were  monitored for the pond and river  water of different locations using approved water sampling method. The findings of this work shows that, low DO and pH.High BOD in the river and high temperature, TDS, EC and carbondioxide in the pond were determined.
Read More