Challenges faced by Safaricom in the aquisition of onecom

Abstract

The acquisition strategy is a growing phenomenon in Kenya today, this has been embraced by many financial and technical based firms as a strategy of choice, it is however still not a popular strategy as many firms seem to tread in care and may take time to pursue the strategy, however, for those firms that have taken the risk, many have succeeded in growing their market share as well as their revenue. This research project was based on a study of the acquisition strategy used by Safaricom Ltd, and a synopsis of how Safaricom acquired Onecom Ltd. It also established the reasons for the acquisition strategy by Safaricom, the process of the acquisition as well as the challenges faced in the realisation of the strategy. The study established that the acquisition strategy was necessary for the firm to make an immediate impact into the data market hence a competitive edge in its competition with local Internet service providers, It was also found that the acquisition was the best way forward in getting to launch different options of the service and have direct product based competition with the Internet service provider firms. The research findings indicate that the strategy if pursued for the right reasons can not only add value to the acquiring firm, but also to the target firm, this is so because the target firm employees could benefit from the expertise of the acquiring firm and learn new ways of doing things. According to this study, findings indicate that the acquisition strategy if correctly pursued can not only increase revenue streams of the mother company or organisation, but also benefit the Kenyan citizens by empowering them from the use of the products produced as a result of the acquisition, a good example is cited in the Safaricom acquisition of Onecom which saw the emergence of cheaper fixed data solutions that lowered the entry barrier for many small businesses and single owned businesses, this therefore improves the country’s economic growth in one way or another by empowering the smaller businesses to enjoy the benefit of such services