Funding Strategies and Competitive Advantage at Batian Nuts Limited

Abstract

Funding strategies may be extremely important in defining an organization's competitive edge in the current era of globalization. Adopting cutting-edge technology, expanding operations, investing in research and development, and luring top talent are all made possible by effective funding strategies. By constantly innovating, upgrading their goods or services, and increasing operational effectiveness, these investments enable firms to stay ahead of their rivals. This study explored the effect of funding strategies on competitive advantage at Batian Nuts Limited. The study employed a case study research design. Qualitative data was collected using interview guides where four senior managers at Batian Nuts limited namely, the head of operations, head of finance, head of risk and head of marketing were interviewed. The findings revealed that Batian Nuts Limited has embraced different fundraising strategies to sustain operations and gain competitive advantage. This includes presales, capital from shareholders, short-term loans from the bank, long-term loans, asset financing, application for grants and engaging impact investors among others. Additionally, effective fundraising strategies have enabled the firm to acquire resources and capabilities such as state of the art facilities, acquire top talent, build capacity in research and development and realize effectiveness and efficiencies in agro-processing hence gaining competitive advantage. Additionally, the firm’s ability to obtain funding is influenced by external factors including fiscal policies, weather patterns and occurrence of calamities such as Covid-19. Further, fundraising activities is coupled by challenges such as expensive loans due to high interest rates, long loan processes and documentation and requirements for collateral especially from commercial banks. The recommendations made include regulation of the lenders to offer some safeguard against exploitation of businesses by banks and digital lenders to ensure survival and sustainability by setting a cap on the interest rates through CBK regulations. The government should consider creating favorable policies and infrastructure to attract foreign investors such as venture capitalists who pump more money into the economy. Such investors also facilitate technology transfer. Additionally, more sensitization should be conducted by both the state and the private sector to educate business owners on the different available financing options. Such initiatives will encompass financial literacy with major reflections on the impact of interest rates on the cost of doing business, savings and investments among others which will in essence foster fundraising efforts as entrepreneurs and companies will begin to see things in a different perspective and consider different financing options.