GAINING COMPETITIVE ADVANTAGE THROUGH COST MINIMIZATION IN SELECTED BREWERIES IN NIGERIA

Author: Onyia Maxwell Kenechukwu
Department: Business Administration
Affiliation: Nnamdi Azikiwe University Awka

This research on gaining competitive advantage through cost minimization in selected breweries in Nigeria was aimed at determining effect of cost reduction on competitive strategy of Nigeria Breweries and Guinness Nigeria PLC. The specific objectives are: to determine relationship between reduction of fixed costs and competitive advantage of the selected brewery companies; to ascertain if reduction in administrative costs has any significant relationship on competitive advantage of the selected brewery companies; and to establish the relationship that exists between reduction in the cost of raw material and firms’ competitive advantage. The ordinary least square multiple linear regression was used to model the effects of these relationships. The findings reveal that not all aspects of cost minimization studied have an effect on the competitive advantage in Guinness Plc as the reduction in cost of raw materials does not significantly impact competitive advantage. On the other hand, all aspects of cost minimization studied have significant effect on competitive advantage of the Nigeria Breweries. From the findings of this study, the researcher came to the conclusion that not all aspects of cost minimization have significant effect on competitive advantage It is therefore recommended that: measures aimed at further reducing the cost of raw materials in Guinness Plc could position Guinness Plc competitively over its competitors; fitting a non-intercept model for the relationship between competitive advantage and administrative cost may improve the strength of relationship already captured by the intercept model; due to the fact that reduction in fixed cost and administrative costs create a competitive advantage, organizations should try to keep such costs as low as possible so as to gain better competitive advantage over their competitors.

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