CHAPTER ONE

INTRODUCTION

This study explores relationship between innovative activities, profitability and firms growth in Nigeria Breweries Plc Awo – Ommama Owerri innovation is the future of any business and without a contains flows of new products. This is so because, the business environment is fast changing and becoming highly competitive so a consumers’ changes in taste and needs.

In this study, the researcher addressed a central issue in innovative studies namely:

PERFORMANCE: Does it pay off to become involved in activity? What forms do the benefits of innovation take? Does innovation entrance short run profitability, or does it contributed to a growth, or both or neither.

One important point about innovation is that it is not without cost, it requires the creation of tangible and intangible assets which increases production cost. S second basic argument about innovation and firm performance is that the innovation and firm performance is hat the innovation of new or technically superior product creates temporary monopolies, which improves the business performance of firms.

However, such temporary imperfect competition can clearly be exploited in at least two ways. On the other, firms can raise prices on the imperfect competition can clearly be exploited in at least two ways. On the other, firms can raise prices on the imperfect competition advantage which imperfect returns on sales. Alternatively, firms can hold prices down, leading to more or less sharp improvement in the price-quality ration on the product resulting In increasing sales and profitability (however measured) may improve via innovation, but innovation will improve the growth of the firm.

However, Nigeria breweries plc also Ommama Owerri does have higher rate of growth of sales (which means also, that the absolute amount of profit grows faster than in non innovating firms) and impact of innovation on growth.

• BACKGROUND OF THE STUDY

Nigeria Breweries plc (NBPLC) is the country’s pioneer brewery incorporated on 16trh November 1946 and commercial production in 1949. it stated as a joint venture between the United African Company (UAC) international, UK and Heineken of Holland. Thus, at inception it was 100 percent foreign owned. Today, the company is 60% Nigeria owned and 40% foreign owned. The 40% foreign ownership is split almost equally between WA holdings ltd, ( for UNILEVA) AND Heineken Bro Uwerijen BV.

Its principal activities includes the brewering and marketing of larger bear, 33 bear, stout , no-alcoholic malt drinks and the boiling of Schweppes ranges of soft drinks and crush range. It operates from six breweries locations namely: Lagos, Aba, Owerri, Kaduna, Ibadan, Enugu, but the Aba location has recently shut down, due to the general recession dilapidated infrastructure facilities, political instability and the attended policy inconsistency and high cost of production in Nigeria, the company suffered declining productivity and profit between 1985 and 1996.

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