Strategic responses to dynamic competitive environment by large internet service providers in Kenya

Abstract

Competition in the telecommunication industry causes firms to develop new products and services, which give consumers greater selection and better products. Strategic response to competition is key as businesses seek to gain competitive advantage and remain relevant in the market and by large the environment. What is required in strategic response is a structured, disciplined, systematic way of surviving in an operational environment characterized by aggressive competition. The aim of the study was to establish the strategic responses by internet service providers to address competition within the telecommunications industry. The study was guided by the following research objective: „To find out strategic responses to the dynamic competitive environment by large internet service providers‟. This study used survey design and collected data from large internet service providers. Purposive sampling was used to determine the sample size. The response rate was 72 percent as only eight out of the eleven respondents were responsive. The data was collected through use of questionnaires which were administered using drop and pick method from senior managers for the research. The data was analyzed using SPSS and the findings presented and discussed by tables, pie charts and bar graphs. The study established that formulation of strategies to counter competition by most large ISP firms was chiefly influenced by meeting the needs, wants and providing benefits for the customers, status of competing forces in the market environment and successes and failures of strategies previously followed by the firm. The strategies enabled the firms to counter competition in that they assist the organization to adapt to the changing business environment, steer the company on ways to raise incomes rapidly than its competitors. The outcome of these strategies was eminent in terms of being steps ahead of competitors in market share and profits. The challenges facing the firms during strategic response to competition included unpredictable government interference, market environment, complexities during implementation of the strategies, high risks involved in the diversification of strategy, weak financial management policies and contradiction between leadership style and management orientation. The study concluded that strategies formulated enabled the firms‟ to remain ahead on emerging trends in the local and regional market, to learn specific customer demands and attend to them sufficiently and to enable the company to device unique products and services that distinguish them from other players in the market. The study findings are a call to action for policy makers and practitioners in the internet service provision sector. The implications are that increased technology advancements and innovations, regulatory and legal framework and market dominance were key competitive challenges affecting the firms in this industry and the government needs to create a more conducive business environment for industry players.