Competitive Strategies Adopted by Airtel Kenya for Success in the Telecommunications Industry

Abstract

Competitive strategy defines the fundamental decisions that guide the organization’s marketing, financial management and operating strategies. Competitive strategy often results in an organization adopting strategic change in the way it conducts its business. Kenya’s telecommunications industry has great potential for growth because of its previous low penetration levels in both fixed and mobile markets. The industry has undergone significant changes, with the incumbent operator Telkom Kenya losing its monopoly in the fixed-line and internationals band width sectors. The last one decade has seen rapid growth due to new players entering the market, the introduction of 3G services by the telecommunication operators and, very recently, duty being waived on new mobile handsets and the allowing of number portability. This research therefore sought to identify the competitive strategies being adopted by Airtel Kenya Limited to tackle competition, and the challenges experienced in applying the strategies. A case study research design was adopted. An interview guide was used to facilitate data collection. The data obtained during interviews, through the interview guide, was analyzed qualitatively using content analysis. The study found that the business environment within which the mobile telephony sector operates has been very volatile. The mobile industry’s rapid growth can be credited to the affordability of mobile phones, lower interconnectivity charges, the infrastructural improvements by operators, the presence of multiple players in the industry, and a stable regulatory environment, among other things. The competitive advantage that Airtel Kenya has gained is that their customers have become strongly attached to the differentiated attributes, compared to the competitors, such as the data services that enable recognition of other caller’s locations. The company faces the stiffest competition in the area of voice service. The study recommends that, although Airtel has been successful in responding to competition in the telecommunication industry and applying suitable competitive strategies, it should engage in more cost reduction as a response to its competitors’ strategies. Airtel should deliver benefits that exceed those of competing products to gain a competitive advantage over the firms. The company should undertake appropriate, persuasive and sustained advertisement, marketing campaigns on products and services. This would increase its customer base and competitiveness within the industry.