Responses of Safaricom limited to increased Competition in the mobile phone service industry

Abstract

The study set out to investigate the challenges faced by Safaricom limited due to increased competition and the responses adopted by Safaricom limited to increased competition in the mobile phone service industry. As a result of liberalization, competition for markets has emerged which has led to privatization of state enterprises to prepare them for effective competition. Privatization of state telecommunication enterprises has started off in most countries in the region. The competitive forces reveal the drivers of industry competition. At the same time, thinking comprehensively about an industry’s structure can uncover opportunities: differences in customers, suppliers, substitutes, potential entrants, and rivals that can become the basis for distinct strategies yielding superior performance. This study adopted a case study design which was the most appropriate in the investigation of the responses of Safaricom Limited to increased competition. The study selected informants who are in senior management at Safaricom Limited. They were subjected to the study through an interview guide which collected primary data. Secondary data was collected from published reports, the mobile phone industry’s publications, periodicals and newspapers. The greatest competitive factor affecting the firm’s performance was shown as the enforcement of new communication regulations. These include licensing, subscriber registration, and mobile number portability. They also cited the environment as a major factor given the nature of competition in the industry. Other factors indicated by the informants were capital requirement, training of the employees, product range, innovation, technology, customer service, network coverage, corporate image, level of service, location, viii target market, product marketing, distribution channels and competitors. Safaricom Limited has responded to challenges of increased competition in key service areas through reviewing of it charges leading to a drop in call tariffs and introduction of group charges. It has continually offered new affordable internet bundles with a wide range fitting every customer’s need and has advanced to new technology such as increasing its 3G footprint and developing the 4G network. It has responded to strengthen its brand with active involvement in community service responsibilities as well as aggressive marketing and promotional drives all over the country. These study findings have to be viewed in account of the following shortcomings that occurred in the course of the conduct of the study. The respondents studied in this research were from one company and conclusions drawn from this study may not be representative and therefore they cannot be generalized to other firms. The study also only captured the members of one focus group thus excluding other important stakeholders like the members of the public and regulators from giving their views. The following are suggestions of further studies that can be carried out. The study should be extended to establish the responses adopted by firms in other industries. Research should also be undertaken to determine what strategies other companies in different related industries use to build competitive advantage.