Resource Allocation Strategy and Competitive Advantage in Nigerian Conglomerate Firms: A Portfolio Perspective

This study analyzes how resource allocation strategies at the corporate level influence competitive advantage generation in Nigerian conglomerates, applying a portfolio management perspective. Corporate portfolio theory and the resource-based view provide the dual theoretical anchors. The research adopts a mixed methods design, combining quantitative analysis of financial resource allocation decisions from ten Nigerian conglomerates over five fiscal years with qualitative insights from senior strategy executives. Secondary data were extracted from audited annual accounts and investor relations presentations. Capital allocation efficiency ratios, internal capital market effectiveness indices, and competitive advantage proxies measured through profitability rankings were analyzed using fixed-effects panel regression. Findings indicate that conglomerates allocating resources using formalized portfolio review processes with explicit competitive advantage criteria achieve significantly higher aggregate group profitability compared to those using political or legacy-based allocation processes. The study finds that cross-subsidization of strategically important but underperforming subsidiaries, when accompanied by explicit turnaround timelines and performance covenants, generates stronger long-term competitive outcomes than premature divestment. The research concludes that Nigerian conglomerate boards must professionalize their internal capital allocation processes using portfolio strategy frameworks to optimize group-level competitive advantage. Keywords: resource allocation, competitive advantage, conglomerates, portfolio management, Nigeria.