GROWTH STRATEGIES AND CORPORATE SURVIVAL OF SELECTED MONEY DEPOSIT BANKS IN ENUGU METROPOLIS, ENUGU STATE, NIGERIA
ABSTRACT
Businesses all over the world are constantly developing strategies to survive the pressure of competition; this situation is not different from that of Nigerian banks. Therefore, this study assessed growth strategies as they relate to corporate survival of Nigerian money deposit banks in a competitive and dynamic business environment. Specific objectives were to: investigate the extent to which merger and acquisition strategy contribute to corporate sustainability; determine the extent to which diversification to new markets increases competitive edge of money deposit banks in Nigeria; ascertain the effect of branch expansion on market share; ascertain the effect of product differentiation on customer retention. The study adopted the cross-sectional survey design. The population was 736 that comprised all permanent employees of Zenith Bank plc, First Bank of Nigeria plc, United Bank for Africa plc and Guaranty Trust Bank plc. A sample size of 377 was obtained using Cochran formula for finite populations. Data collection was by questionnaire and oral interview. Cronbach’s Alpha method was used to determine reliability of the data collection instrument, and a reliability coefficient of 0.87 that depicted item consistency, was obtained. Experts from both the industry and academia ascertained the face validity of the instrument. Pearson Product Moment Correlation Coefficient and Z-test were the test-statistics used for data analysis. The probability level of acceptance was at 5% level of significance. The results of this study are: To a large extent, merger and acquisition strategy contributed to corporate sustainability (r = 0.814; p < 0.05). Diversification to new markets to a large extent increased competitive edge of money deposit banks in Nigeria (r = 0.877; p < 0.05). The effect of branch expansion on market share was significant (r = 0.749; p < 0.05). Product differentiation had a significant effect (r = 0.89; p < 0.05) on customer retention. The study concluded that there was a significant relationship between growth strategies and corporate survival of money deposit banks in Enugu metropolis. The study recommends that: money deposit banks in the study area should make the best use of merger and acquisition opportunities to sustain their corporate survival; professional feasibility and viability appraisals are crucial to diversification to new markets so as to aid risk management and control; physical, socio-political, economic, religious, legal and political considerations of the new area under deliberation are critical to branch expansion. Management must endeavour to be armed with adequate but necessary data and information on the new market the organization is venturing into so as to plan business operations that are consistent with need of the target population; given that change is the only constant and our world is ever evolving, attempt must be made to move with the times in introducing modern thoughts which advance the product of the organization.