The Strategic Response for Sustainable Growth of the Mobile Money Product (M-pesa) by Safaricom Limited in the Kenyan Market

Abstract

Organizations are open systems, they depend on the environment for resources and also to discharge their outputs. More importantly they operate in an environment of change. This means that they have to proctively monitor the changes in their business environment which has become very competitive, volatile and more importantly unpredictable and align themselves accordingly. It is the environment in which organizations operate which shapes them and influences their choices of the strategy and determines their performance.Gone are the days when organizations used to sit and wait for customers, customers now have a choice and they value quality products and services. Companies require strategic thinking and only by evolving good business strategies can they become strategically competitive (Ansoff and McDonnell 2009). Kenya’s mobile money industry is a major playe in the Financial Services Sector of the Kenyan Economy. This study used a case study approach to investigate the strategic responses by Safaricom Limited Kenya to the dynamic business environment. Data was collected using an interview guide which was admistered by face to face meetings with the respondents namely; The General Manager, M-PESA services, and the functional head of Safaricom Limited who include; Head of Strategy and Innovation, Head of Network Operations, Head of Product Development, Head of M-PESA Operations and Head of Human Resources. In total 12 face-to-face interviews were conducted. The qualitative data collected was analyzed using content analysis technique. The study identified that one of the major challenges within the mobile money industry was poor regulation and lack of prudent governance framework. The study recommends that the regulation within the industry should be improved and a collaborative approach used. There is also need to ensure there is transparency and ethical practices within the sector and the government bodies charged with over-sight authority. This will be useful in driving investor confidence and for the long term sustainable growth of mobile money products and the industry generally. The adoption of strategic responses by Safaricom Limited has ebabled it mantain tis market share. The findings from the study indicates that the company uses an innovative and collaborative low costs strategy model to market its M-PESA products so as to gain competitive advantage. The company also ensures that the products, processes and operations are safe for the environment and targets to reduce energy usage and related greenhouse gas emissions, conservation of water, reduction of waste and exploration of opportunities for reuse and recycling in driving the sustainability agenda. The upholding of ethics and values that promote integrity and highest ethical business practices are promoted and encouraged within the Safaricom staff. This promotes sustainable practices within the business ecosystem especially within then the distribution channel that is directly response for providing M-PESA retails services. Although the company has managed to differentiate themselves from other players in the market, differentiation alone without aggressive marketing of the products will not attract sufficient customers and it is recommended therefore, that the company continue to allocate more funds to the advertisement of its M-PESA product especially now that there is a new entrant in the market. The findings of the study indicated that firms at times are quick to come up with strategies to deal with changes in the business environment without considering the effects that those responses may have on the business. Thus strategies should be considered wisely, and an analysis of the effectiveness of those responses should be carried out before the strategies are adopted. This will ensure that the strategies suit all the organization thus ensuring a strategic fit for the organization.