Competitive Strategies and Performance of Mobile Service Providers in the Telecommunication Industry in Kenya

Abstract

The purpose of the study was to establish the impact of competitive strategy and performance of mobile service providers in the telecommunication industry of Kenya. We shall identify competitive strategies that the players in the telecommunication sector use to remain competitive in the market. The study was guided by Resource based view, Market based view and knowledge based view theory. Cross-sectional research design was adopted and targeted four major telecommunication firms operating in Kenya, that is; Airtel Limited, Safaricom Limited, Equitel Limited and Telkom Kenya. The unit of observation was the managerial staff of the four telecommunication firms who are involved in formulating strategic decisions for the firm. Closed and open ended statements in the questionnaire were used to collect primary data. Qualitative and quantitative procedures were used to analyze the data. Qualitative procedures involved use of regression analysis while data collected from quantitative techniques were analyzed using frequencies, standard deviation, means and percentages which was aided by SPSS software. Regression analysis was also adopted to determine the nexus between the study variables. The study established that the telecommunication companies in Kenya have adopted cost leadership strategy, market focus strategy and differentiation strategy. In regard to market focus strategy, the study found out that the companies segmented products based on benefits sought by the customers. On differentiation strategy there was an indication that the companies had adopted differentiation strategies by differentiating their products and services from their rivals. On cost leadership strategy, it was found that the companies used cost strategy to increase the market share and keep ahead of competition. The study concluded that the relationship between competitive strategies (“differentiation strategy, market focus strategy, cost leadership strategy”) adopted and organization performance of telecommunication sector in Kenya is positive and significant. The study recommended that telecom companies should continuously and persistently invests in new technology and concentrating with devising unique and imitable products so that they can be distinct from their competitors through product differentiation; the companies should also utilize benchmarking so that they can compare their differentiation strategy with best performing companies in the service industry. The study also recommended that the telecommunication companies in Kenya should continue innovating and developing new products as well as doing aggressive marketing for them to be and remain competitive.