Strategies employed by Ericsson Kenya limited to develop competitive advantage

Abstract

This management research was undertaken so as to understand the strategies employed in organizations to develop competitive advantage as well as the challenges this organizations are faced with in their pursuit to be the best player in the industry. The urge to conduct this research was due to the stiff competition in the telecommunications industry in Kenya that has left Ericsson not shaken and still the industry leader for over seven years now. Despite the competition, Ericsson has continued to be the leading provider of telecommunications equipments in Kenya. Its performance has continued to improve year by year, with over 70% of the telecommunications work currently being carried out by this company. The objective therefore was to investigate and document the various strategies employed by Ericsson Kenya Limited as well as the challenges and the limitations the company faces in its pursuit to develop competitive advantage. The study focuses on the telecommunications industry which is one of the most competitive industries in Kenya today and has largely grown over the past ten years. The - growth in this industry is mainly due to government liberalization in the early 1990's that saw other telecommunication companies venture into the market. Ericsson Kenya Limited joined the competition as a telecommunication provider in 2002, and has largely grown over the past seven years of its operations in Kenya. However, this industry is currently being threatened by the extensive entry of mahy competitors, who are basically fighting for the same customer. The survival of any player in this industry lies in coming up with strategies to ensure the development of competitive advantage and come up with ways of ensuring its sustainability. v The study aimed at collecting in-depth data and thus constituted a case study. The study utilized both primary and secondary data. Primary data was collected by interviewing the management and the departmental assistants. An interview was carried out with five top management personnel including the company controller, project managers and other top managers of each department. These managers are all experienced in corporate management with outstanding international experience as they are all currently long term assignment employees in Kenya but are Ericsson permanent employees in other developed countries. Their purpose is to oversee the day to day running of the company and therefore have good knowledge of the Ericsson operations and strategies. The data analysis concentrated on the ideas, themes and strategies of competitive advantage by Ericsson Kenya Limited and the challenges faced by this company at large. Data collected was analyzed using content analysis and it involved a detailed description of items that concerned the study. The key findings on strategies applied by Ericsson to develop competitive advantage - include technological leadership, focus on operational excellence and strategic marketing, customer intimacy, embarking on cost cutting measures, having a well defined human resource management, clear communication and building a corporate image, and investment in research and development. On the other hand, the challenges faced by this organization include increased competition, customer failures, government policies, global economic recession and cultural challenges. This study has several recommendations. Initially, there is need for the company to train its employees on change and stress management to avoid anxiety, panic and work related stressors. There is also need for ( management to replace consultants with local employees and also recruit local staff to high management positions for motivation. Finally, an intensive analysis of the customer is necessary as the customer is critical for survival of the business. However, the study had several limitations. Some of the top managers scheduled for interview declined to participate and others only responded to a few questions as opposed to the full interview guide leading to some inconclusive interviews. The managing director who is new to the company was not interviewed as he felt that he was not the right respondent. Finally, there is need to conduct research on more organizations in this industry as well as those of related industries in order to shed further light on this important area of academic discourse. This is mainly because different organizations differ in their structures, systems, culture, objectives and resources.