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.