FIRM RESILIENCE AND CUSTOMER RETENTION OF SELECTED FAST MOVING CONSUMER GOODS COMPANIES IN LAGOS STATE, NIGERIA
Abstract
The fast-moving consumer goods (FMCG) industry in Nigeria operates within a volatile economic landscape marked by inflation, fluctuating exchange rates, regulatory inconsistencies, and shifting consumer preferences. These factors present substantial risks to long-term profitability, often resulting in low customer retention and inconsistent revenue growth. In Lagos State, FMCG companies face particular challenges in maintaining customer loyalty due to increased competition, evolving consumer demands, and frequent operational disruptions. While organizational resilience is essential for overcoming market obstacles, many companies find it difficult to retain customers amid these challenges. This study thus examines the effect of firm resilience and customer retention of selected fast moving consumer goods companies in Lagos state, Nigeria. The study adopted a survey research design to investigate the effect of firm resilience on organizational sustainability in selected FMCG companies in Lagos State, Nigeria. A target population of 16,785 employees was identified across selected companies. Using the Krejcie and Morgan sample size determination table, 488 respondents were selected. Data were collected using a structured and validated questionnaire, out of which 379 responses were completed and deemed usable, representing a 77.7% response rate. Reliability of the instrument was established using Cronbach’s alpha, and the data were analyzed using both descriptive and inferential statistical methods. The findings revealed that firm resilience significantly had a significant effect on customer retention (Adj. R² = 0.250, F(5, 373) = 26.172, p < 0.05). Based on the results, the study concludes that enhancing firm resilience significantly contributes to sustainable business customer retention. Therefore, the study recommends that FMCG companies should focus on delivering high-quality products, personalized services, and responsive customer support. Building brand trust through transparency, consistency, and value-driven engagements will strengthen customer loyalty. Additionally, implementing digital marketing strategies, loyalty programs, and seamless service delivery will further improve customer retention rates.
Keywords: Firm Resilience, Financial Resilience, Risk Management, Market Responsiveness, Operational Flexibility, Innovation Capability, Customer Retention
CITATION: Fajembimo, A. I., & Akpa, V. O. (2025). Firm resilience and customer retention of selected fast moving consumer goods companies in Lagos State, Nigeria. The Strategic Journal of Business & Change Management, 12 (2), 527 – 542. http://dx.doi.org/10.61426/sjbcm.v12i2.3226
Full Text:
PDFReferences
Ahmić, A. (2022). Strategic organisational sustainability orientation influence on organisational resilience: Moderating effect of firm size. Business Systems Research, 13(1), 169–191. https://doi.org/10.2478/bsrj-2022-0011
Benevolo, C., Pizzi, S., & Amato, F. (2018). Operational flexibility and its role in organisational resilience. Journal of Business Research, 85(3), 121-132.
BrandExtract. (2021). The importance of brand resilience in an uncertain world.
Camison, C., & Villar-Lopez, A. (2016). Organisational innovation as an enabler of technological advances: A study of its relationship with innovation capability. Research Policy, 45(4), 875-894.
Catalyst BI. (2024). Building resilience: Top strategies for customer retention during economic downturns.
Duchek, S. (2020). Organisational resilience: A capability-based conceptualization. Business Research, 13(1), 215-246.
Edeh, F. O., Ugboego, C. A., & Chibuike, O. N. (2019). Effect of customer relationship management on organisational resilience of deposit money banks in Nigeria. International Journal of Economics, Business and Management Studies, 6(2), 272–284.
Eisenhardt, K. M., & Martin, J. A. (2000). Dynamic capabilities: What are they? Strategic Management Journal, 21(10-11), 1105-1121.
Essuman, A., Li, Y., & Jiang, H. (2023). Operational resilience as a driver of profit margins: Evidence from supply chain disruptions. International Journal of Production Economics, 244, 108-120.
Esteve-Pérez, S., & Rodriguez, D. (2024). Coping with high decline: Firms’ resilience to adversity. Small Business Economics, 63(1), 193–219. https://doi.org/10.1007/s11187-023-00809-8
Euromonitor International. (2023). Consumer trends shaping the FMCG market. https://www.euromonitor.com/consumer-trends-fmcg-2023
Fathi, M., Yousefi, N., Vatanpour, H., & Peiravian, F. (2021). The effect of organisational resilience and strategic foresight on firm performance: Competitive advantage as a mediating variable. Iranian Journal of Pharmaceutical Research, 20(4), 497–510. https://doi.org/10.22037/ijpr.2021.116145.15723
Fraser, J., & Simkins, B. J. (2021). Enterprise risk management: Today's leading research and best practices for tomorrow's executives. Wiley.
GeoPoll. (2023). The fast-moving consumer goods market in Africa: Trends and challenges. https://www.geopoll.com/blog/fmcg-market-africa/
Gonzalez, A., & Smith, J. (2023). Organisational resilience: The key to sustaining customer relationships during crises.
Helfat, C. E., Finkelstein, S., Mitchell, W., Peteraf, M. A., Singh, H., Teece, D. J., & Winter, S. G. (2007). Dynamic capabilities: Understanding strategic change in organizations. Blackwell.
Hogan, S. J., & Coote, L. V. (2016). Organisational culture, innovation, and performance: A test of Scheins model. Journal of Business Research, 69(11), 5500-5505.
Homburg, C., Klarmann, M., & Schmitt, J. (2022). Relationship marketing as a driver of customer loyalty: The role of firm resilience in turbulent times.
Hopkin, P. (2018). Fundamentals of risk management: Understanding, evaluating, and implementing effective risk management. Kogan Page.
Israel, B. (2022). Enhancing customer retention in manufacturing SMEs through supply chain innovative practices. Management Dynamics in the Knowledge Economy, 10(3), 272–286. https://doi.org/10.2478/mdke-2022-0015
Kohli, A. K., & Jaworski, B. J. (1990). Market orientation: The construct, research propositions, and managerial implications. Journal of Marketing, 54(2), 1-18.
KPMG. (2023). Thriving amidst turbulence: Navigating the dynamic consumer markets in Nigeria. https://assets.kpmg.com/content/dam/kpmg/ng/pdf/thriving-amidst-turbulence(cm-thought-leadership-july-2023)updated.pdf
KPMG. (2024). Market polarisation: The implications for FMCG companies. https://assets.kpmg.com/content/dam/kpmg/ng/pdf/2024/08/Market%20Polarisation%20The%20Implications%20for%20FMCG%20Companies%20August%202024.pdf
Kumar, V., & Reinartz, W. (2020). Creating enduring customer value: The role of engagement strategies in enhancing retention rates.
Laari, S., Rintala, O., Töyli, J., Solakivi, T., & Ojala, L. (2024). Evaluating firm resilience through responsiveness and logistics outsourcing in the COVID-19 era. Supply Chain Management: An International Journal, 29(7), 71–82. https://doi.org/10.1108/SCM-02-2024-0133
Lengnick-Hall, C. A., Beck, T. E., & Lengnick-Hall, M. L. (2018). Developing a capacity for organisational resilience through strategic human resource management. Human Resource Management Review, 28(3), 247-258.
Linnenluecke, M. K. (2017). Resilience in business and management research: A review of influential publications and a research agenda. International Journal of Management Reviews, 19(1), 4-30.
Mabzor, S. C., Nwaizugbo, I. C., & Okeke, T. C. (2021). Customer relationship management and customer retention in the broadcast sub-sector: A study of Anambra State. Journal of Marketing Management Studies, 7(2), 45-62.
Martins, E. C., Martins, N., & Terblanche, F. (2019). Building an innovative work environment: The relationship between innovation capability and organisational success. Innovation: Organization & Management, 21(1), 65-78.
Merlo, O. (2021). Brand resilience in an uncertain world: Protecting reputation through transparency and engagement.
Ortega, F., & Ortega, L. (2016). Understanding operational flexibility in dynamic markets: A resource-based approach. International Journal of Operations & Production Management, 36(7), 972-991.
Pertheban, R., Samuel, A., & Kumar, S. (2023). The role of dynamic capabilities in fostering organisational resilience. Journal of Business Strategy, 18(2), 72-85.
Rai, A., & Subhashree, S. (2024). Corporate governance and its impact on financial performance of selected telecom companies. EPRA International Journal of Economic and Business Review, 12(5), 1-11. https://doi.org/10.36713/epra17168
Ritala, P., & Hurmelinna-Laukkanen, P. (2017). Incremental and radical innovation in coopetition: The role of absorptive capacity and appropriability. Journal of Product Innovation Management, 34(4), 512-528.
Schreyögg, G., & Kliesch-Eberl, M. (2007). How dynamic can organisational capabilities be? Towards a dual-process model of capability dynamization. Strategic Management Journal, 28(9), 913-933.
Smith, A., Stirling, A., & Berkhout, F. (2018). The governance of sustainable socio-technical transitions. Research Policy, 34(10), 1491-1510.
Sroka, Ł., & Wieczorek-Kosmala, M. (2024). Operating risk and firm’s profitability: Evidence from non-listed manufacturing firms from V4 countries. Contemporary Economy, 18(1), 1-14. https://doi.org/10.26881/wg.2024.1.01
Sushil. (2017). Strategic flexibility: Managing uncertainty and risk. Global Journal of Flexible Systems Management, 18(2), 115-123.
Teece, D. J., Peteraf, M., & Leih, S. (2016). Dynamic capabilities and organisational agility: Risk, uncertainty, and strategy in the innovation economy. California Management Review, 58(4), 13-35.
Teece, D. J., Pisano, G., & Shuen, A. (1997). Dynamic capabilities and strategic management. Strategic Management Journal, 18(7), 509-533.
Ullah, Z. (2022). The determinants and performance outcome of the firm's capacity to maintain a loyal customer base.
Wang, C. L., & Ahmed, P. K. (2007). Dynamic capabilities: A review and research agenda. International Journal of Management Reviews, 9(1), 31-51.
Widiana, D., & Soetjipto, B. (2021). The role of psychological capital, trust, ambidexterity and strategic flexibility on organisational resilience and survival in dealing with COVID-19 pandemic.
You, N. N., Lou, Y., Zhang, W., Chen, D., & Zeng, L. (2023). Leveraging resources and dynamic capabilities for organisational resilience amid COVID-19. South African Journal of Business Management, 54(1), a3802. https://doi.org/10.4102/sajbm.v54i1.3802
DOI: http://dx.doi.org/10.61426/sjbcm.v12i2.3226
Refbacks
- There are currently no refbacks.
This work is licensed under a Creative Commons Attribution 3.0 License.
PAST ISSUES:
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.