Application of Ansoff's Growth Strategies by Internet Service Providers in Kenya

Abstract

The purpose of this study was to establish the extent to which Ansoff's Growth Strategy has been applied by Intemet Service Providers and the challenges they faced in its application. In this context the study examined the four Ansoff's growth Strategies namely: market penetration, market development, product development and diversification strategies. The study was descriptive in nature. The population of interest consisted of all Internet Service providing firms in Kenya which according to a list obtained from Communications Commission of Kenya as at July 2006 numbered 28 firms. Given the small number of firms a census study was conducted. Primary data was collected using a semi-structured questionnaire. The questionnaire was administered to the respondents through drop and pick later method. However in most instances the researcher was available to clarify on issues, not well understood by respondents. Primary data was collected using a semi-structured questionnaire and only 16 firms responded out of the 28 firms. Data was analyzed using frequencies, percentages, mean scores and standard deviation. Results showed that most firms applied Ansoff Growth Strategy with market penetration being the most widely used by Internet Service Providers. Respondent firms applied Ansoff's growth strategies of market penetration to a very large extent, market development to large extent, product development to a moderate extent and diversification to a small extent the respondents stated challenges of its application to include IT piracy, perception of growth strategy, infrastructure and legal framework and lack of organizational IT policy. It was recommended that intemet service providing firms utilize Ansoff's growth strategy of diversification as a means of achieving growth within a rapidly growing and competitive sector. One limitation of the study was that the study included Internet service providers who were multi-nationally based but set up subsidiary firms in Kenya hence making the study not to be representative of Intemet Service Providers in Kenya. Another limitation is the continuous merging of the Internet Service Providers, whereby they appeared as independent Internet Service Providers on the list generated by the Communication Commission of Kenya and in essence they were merged entities. Only 57.1 response rate was achieved, had all the Internet service providers responded the findings would have been different. It is recommended that a similar study be done on purely public sector Internet service providers because this study was based on current Internet Service Providers with 96% of the firms set up as private enterprises. This study recommends a further study of the application of other growth and success strategies such as operational efficiency and knowledge management on Internet Service Providers. Further more a study can be done purely on acquisition as a form of diversification within Internet Service Providers.