Diversification strategy :the case of Nation media group

Abstract

The study was undertaken to investigate and document the experiences of a diversified firm. This stems from the fact that here have been a number of studies that have been conducted in the past and have yielded mixed results. The study took the Nation Media Group as a unit of study. The research problem was therefore to document the experience of Nation Media Group with diversification. To be able to derive this information, a case study design was used. This is because of the very probing nature of a case study that would help achieve the objective of the study. The study results gave indications to the extent ofNMGs diversification, the reasons for diversification, the implementation of the said strategy and the performance of the firm in the light of this strategy. The extent of diversification was looked at from the perspective of diversification by breadth, diversification mode and geographic diversification. Diversification by mode established that the company largely used internal diversification or start-ups in Kenya with an exception of a few and went for external diversification for all the international ventures. For geographic diversification, it was established that the company has entered so far to all the countries in East Africa but so far to none to the central African region despite the desire to be the leading multi-media company in the East and Central African region. It was established that choice of diversification was mainly due to the strategic intent of the company. In implementation, the major structures included the board and the executive committee. The process, that the strategy was planned and the chronology of diversification since 1998 is given. VI The performance indicators of the firm have also been presented. These indicators include the financial, internal as well customer perspective. The indicators present an all rounded perspective on diversification and why NMG may be considered successful with diversification. The limitations of the study included; the company policy on information outflow, significant use of secondary data, other factors contributing to performance other than diversification and the policy of consolidating the accounts. For further research, it was recommended that there should be a study on a firm that has had disastrous results with diversification; a study on a number of firms in the same industry and find out their experiences with diversification; a study on competitive advantage derived from diversification and a study impact of diversification on the different business units in a diversified firm.