Company delivery as a strategy for competitiveness in the Nigerian flour industry

Abstract

The strategy of competition in the Nigerian flour industry has changed in recent times. In the main, the use of company delivery has become more pronounced compared to price and quality competition. This paper examined the competitiveness of the use of company vehicles to deliver goods to customers. Using data from the sales orders made over an 18-month period between January 2016 and June 2017 of 6 flour mills, the evidence indicates that company delivery only had significant effect on the sales volume of smaller firms. Dangote, Life and Valleumbra flour mills have delivered most of their sales with own vehicles in the last one decade. However, their market share in the industry in terms of sales and revenue has remained less than 20 percent over the years. The relevance seems to decline as the firm’s size grows and each deploys more resources to compete for price and quantity. Since the impact on competitiveness is transmitted through improvement in sales volume, a flour firm seeking to be competitive cannot rely solely on its delivery capacity.

Keywords: Company delivery, Competition, Flour mills