Strategic Innovation as an Approach to Sustainable Competitive Advantage by Safaricom Limited in Kenya

Abstract

Strategic innovation has opened a new perspective in the way business is conducted. Most organizations are adopting strategic innovations and formulating strategy to guide them. The study sought to determine strategic innovation as an approach to sustainable competitive advantage by Safaricom Limited. In the study, the level of competition in the Kenyan telecommunication industry has been found to have increased especially in the last ten years. From one dominant player in the 1990s,the number of players has increased to five at present which has meant that the firms have had to come up with new strategies that will give its products competitive edge over the competitors The research was conducted through a case study within Safaricom Limited. Primary data was collected from the targeted respondents through an interview guide. The interview guide was conducted on the top managers who included the CEO, Finance manager, human resources manager, marketing manager, customer operations manager, strategy and innovation manager due to their direct involvement in the business decisions that drive growth and performance of the organization. As one of the market leaders in the Kenyan telecommunication industry, Safaricom Limited has made great efforts in its bid to continue being a market leader in the country through employment of appropriate competitive strategies. The study found out that a number of competitive strategies are being employed by the firm. These competitive strategies include focus, penetration, product differentiation, pricing and cost leadership. The study found that the organization has optimized strategic innovation for its customers and it understands how to translate the strategic innovation to business indicators. The study concludes that, the choice of company’s competitive strategy is concerned with choosing a favourable industry to operate, it is concerned with achieving profitability in the long term and which factors determine that, as well as establishing the factors that affect the company’s position in the market. The study concludes that competition is at the core of the success or failure of firms since it determines the appropriateness of a firm’s activities that can contribute to its performance such as innovation, a cohesive culture and good implementation. The study concludes that competitive strategy helps to search for a favourable competitive position in an industry, aims to establish a profitable and sustainable position against the forces that determine industry competition. The analysis of Safaricom Ltd found out that, it is trying to differentiate itself with the other players in the market. Porters’ differentiation strategy is frequently used within the company and has been noted to be working. The study concludes that the Telecommunication industry is a high speed changing market and it is impossible to stick to only one strategy which porter suggests. Thus in order to succeed, a company has to use more than one strategy at least to have a backup strategy in case the first one is a failure. The study found out that the company has created a unique position in the market through provision of goods and services, it is therefore recommended that they continue investing in coming up with unique products so that they can differentiate themselves, should continue innovating products which will compete with other companies products while doing aggressive marketing .