Strategic response to competitive environment: A case of Safaricom limited.

Abstract

Firms have to respond strategically to environmental factors in order to be sustainable (Hamel and Prahalad, 1993). One of the environmental influences to a business arises from competition. Increased competition threatens the. attractiveness of an industry and reducing the profitability of the players. It exerts pressure on firms to be proactive and to formulate successful strategies that facilitate proactive response to perceived and actual changes in the competitive environment. A company has competitive advantage whenever it has an edge over its rivals in securing customers and defending against competitive forces (Thompson & Strickland, 2002). Sustainable competitive advantage is born out of core competencies that yield long-term benefit to the company. The rapid growth of Safaricom (Kenya) as a mobile phone service provider has acted as a major catalyst in looking at its response strategy. The services sector is increasingly becoming a dominant force in the world economy and therefore deserves as much attention. The objective of this study was to determine the strategic responses to competition by Safaricom Ltd. The study was carried out through a case study of Safaricom Company limited. Personal interviews were done with six heads of departments from various departments in the organisation using an interview guide. Content analysis technique was used to analyze the data. The study found out that there are several environmental changes that affect the operations of the business but the most significant factor is competition. The firm has reacted to competition and to the environmental changes in general using marketing and other strategies that have been very successful.