A case study of corporate diversification and vertical integration in Africa

Abstract

Africa is home to some of the world’s most original, resilient, and remarkable companies. The singular challenges and opportunities of the continent’s economic environment have given rise to idiosyncratic strategies and business models. However, there is a notable absence of studies on African companies. While there are numerous noteworthy companies in Africa, there are few as relevant, successful, and influential as the Dangote Group. This paper aims to add to the limited literature in the area by analyzing the business model and strategic choices of Dangote Cement, the Group’s flagship business and one of Africa’s industrial giants. In particular, it explores its corporate diversification and vertical integration strategies, which are at the core of its success. This article is based on 7 interviews with internal and external Dangote stakeholders and a detailed questionnaire completed by the Strategy Department of the firm, together with public data of the company. While the topics of diversification and integration have been studied in multiple contexts, this article provides an original perspective by applying existing research and management thinking to the specific business environment of Africa. This paper explores how and why Dangote Cement diversifies and how it identifies and integrates the advantages and disadvantages of its strategic choices. We believe it provides an original perspective that furthers our limited collective understanding of and research on strategic practices in Africa, the world’s last business academic frontier.