Application of Value Added Services (Vas) as a Strategic Tool by Safaricom Limited Kenya

Abstract

The business environment has changed dramatically within the last decade. Globalization and market liberalization has altered the way firms compete within and interact both with its customers and suppliers. In response to the progressively dynamic developments and turbulent business environments, business executives are increasingly being confronted by the necessity to attain the organizational capabilities for continuous innovation by looking at various strategic options. Companies have invested considerable time and effort in developing value added services (VASs) that work and often consider adopting innovative management tools to address the challenge of improving service quality, increasing productivity and competitive advantage. One modern management tool adopted by a few service-oriented companies is value addition. Value addition can be based on its impact into those sustaining the current competitive marketplace by enhancing existing products or services valued by customers and those that disrupt the marketplace by fundamentally altering ways customers think about product or service performance. Telecom providers invest in these strategic initiatives to be able to cross-sell additional mobile services and enlarge their share-of-wallet with the consumer. This way, the provider does not only get more revenue from its customers, but also creates a better ‘lock-in’. However, notwithstanding the empirical discussion in the literature in respect of VASs strategies, there is both a theoretical and an empirical gap for a more in-depth understanding of the way user value is created in mobile commerce services for strategic purposes. The present study seeks to enrich the discussion on adoption of VAS as a strategic management tool and contribute to the existing literature on their associations.The study is specific to Safaricom Ltd, a local telecommunications company and the most successful company by financial performance. Through descriptive tools, the results of this study will be of great relevance to organizations facing strategic management challenges, as well as to the academic circles.