Business Models, External Environment And Performance Of Safaricom Limited In Kenya

Abstract

The main objective of this research project was to investigate the relationship between business models, external environment and performance of Safaricom limited in Kenya. As the level of global competition increases and profits dissipate, business organizations will seek to gain competitive advantage by breaking recipes of industries that were already established while engaging in innovation models that facilitate effective running of business activities. The predictor variables of the study was Safaricom business models that comprised of core internal competencies, revenue drivers and pricing volume and margins market differentiation and the moderating variable was the external environment. The study adopted a case study research design. The study used primary data. The researcher utilized an interview guide as the main data collection instrument. Data was collected through a face to face interview with the interviewees. The findings shows that with regard to customer identification, the process is through market analysis, demand of products, other customer request, mass market demand for services and market research. In regard to the value chain and linkages business model approach, Safaricom limited sets up the right network infrastructure e.g. Fibre optic network, Base Transceiver Stations and builds products and services on top of these infrastructure. The value chain and linkages business model approach take through online shop, channel partners (i.e. agents), Safaricom shops etc and work with distributors to sell the products countrywide. The core internal competencies in Safaricom limited were very good engineers, HR, technology, logistics business development teams and the company had qualified staff with technical & sales competence. To avoid harsh economic conditions in the country, the study found that adopting different business strategies based on forecasted economic conditions on yearly basis, price changes, tax regime and cost reductions can enhance performance of the company. In relation to how Safaricom scans the environment and respond to specific opportunities and threats to come up with appropriate business model, the results shows that using market research, industry surveys, customer feedbacks, engagements on an ongoing process has been adopted. The study recommends that resources should be devoted generously towards market research and appropriate customer database should be established to capture the statistics of customer demands so that the company can have the trend of services that are highly demanded and consequently enhance value creation in the respective service line. In addition, with regard to rapid technological changes and market turbulence, the study perhaps recommend that market research, enhanced customer feedback path and effective research and development should be established in the company to enhance customer satisfaction and in the long run, performance of the company will improve significantly.