Porter’s Generic Strategies and Firm Profitability in the Nigerian Retail Industry

This research examines the application of Porter's generic strategies and their effect on firm profitability within the Nigerian retail industry, with emphasis on firms operating in the South West zone. The retail sector has experienced rapid transformation driven by e-commerce adoption, urbanization, and evolving consumer preferences. The study adopts a survey research design, collecting primary data from retail chain managers and business owners in Lagos and Ogun states. A total of 110 respondents were sampled using stratified random sampling. Structured questionnaires covering cost leadership, differentiation, and focus strategies were administered, and profitability data were triangulated with company financial disclosures. Data analysis employed descriptive statistics and multiple regression. Findings indicate that differentiation strategy has the strongest positive effect on profitability among the sampled firms, particularly for firms targeting middle and upper-income urban consumers. Cost leadership remains effective for volume-based retailers serving price-sensitive markets. The focus strategy showed moderate profitability outcomes, largely concentrated among niche specialty retailers. The study concludes that Nigerian retailers should consciously select and consistently implement one or a combination of Porter's generic strategies aligned with their target market and resource capabilities. Recommendations include annual strategy audits and competitive positioning assessments. Keywords: Porter's generic strategies, firm profitability, retail industry, differentiation, cost leadership.