Competitive Strategies and Firm Performance in the Mobile Telecommunication Service Industry: A Case of Safaricom Kenya Limited

Abstract

Purpose: The sought to examine the relationship between competitive strategies and firm performance in Safaricom Kenya limited. The study was guided by the following specific objectives: to examine the competitive strategies adopted by Safaricom Ltd; and to assess the relationship between the competitive strategies used by Safaricom Ltd. and its performance. A review of the relevant literature was undertaken in order to eliminate duplication of what has been done and provide a clear understanding of existing knowledge base in the problem area. The literature review is based on authoritative, recent, and original sources such as journals, books, thesis and dissertations. Methods: A case study design was used to undertake the study. The population of the proposed study will be the Safaricom top revenue drivers, namely consumer sales and retail departments, which are divided into regions covering the whole country. Consumer sales department is structured into six regions – Coast, Nairobi, Mountain, Eastern, Rift Valley and Western/Nyanza and each region is represented by 4 area managers.  The Retail department is also structured into six regions - Coats, Nairobi East, Nairobi West, Central, Rift Valley and Western/Nyanza and each region is headed by an Area Retail Manager. The study lasted three months. A semi-structured questionnaire was used to collect primary data from the respondents. Statistical Package for Social Sciences (SPSS) was used as an aid in the analysis. Data pertaining to the profile of respondents was analyzed by employing content analysis while determination of the link between the competitive strategies and organizational performance, the strategy related items were subjected to a factor analysis to test whether the strategic practices naturally group into the various competitive strategies. Results: The findings also show that the strategies adopted by commercial banks in Kenya so as to cope with the competitive environment include vvigorous pursuit of cost reductions; providing outstanding customer service; improving operational efficiency; controlling quality of products/services; intense supervision of frontline personnel; developing brand or company name identification; targeting a specific market niche or segment; and providing specialty products/services. The findings also show a significant relationship between the strategies adopted by commercial banks in Kenya and their respective performances with respect to the following objective performance indicators: total revenue growth, total asset growth, net income growth, market share growth and overall performance or growth.

Keywords: Competitive strategies; firm performance; mobile communication; service industry