Impact of Vertical Integration Strategy on the Financial Performance of Olam Nigeria Limited

Abstract

The objective of the study was to provide empirical evidence regarding the impact of vertical integration on the financial performance of Olam Nigeria Limited. Data collected were gotten from Olam Nigeria Limited financial record and questionnaires administered to employees of Olam Nigeria Limited within the study sample frame. The secondary data was cross-sectional between the period of 2010-2018. While the administered questionnaire was to 183 employees of Olam selected using convenience and snowball sampling. An econometrics model was used to identify and evaluate the impact of vertical integration on financial performance. The study adopted an explanatory research design and quantitative measurement. The primary data was analyzed using a Statistical Package for Social Sciences (SPSS) software version 20 was used to analyze the primary data, using frequency and percentage to describe the primary data. On the other, the secondary data analysis using an econometric-view statistical package series 7. Furthermore, the secondary data described using descriptive statistics, ordinary least squared regression to explain the independent variable’s impact on the dependent variable, and unit root to check if the regression was spurious; and determine stationarity to test the null hypotheses. The study findings indicated a positive impact of vertical integration components on financial performance measures in Olam Nigeria Limited. The findings supported the works of (Behesti & Hultman, 2014; Isaksen, 2007). Any firm considering vertical integration should consider their present financial status and the cost implication to the prospective benefit before embarking on the strategy as it is evidently capital intensive.