Strategic management of value chain activities and performance of safaricom Kenya Limited
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The objective of this study was to determine the strategy of value chain activities that constitute to the performance of Safaricom Kenya Limited and also ascertain fundamental factors influencing the value chain activities in Safaricom Kenya. Value chain analysis is carried out in order to grasp the behaviour of costs and the sources of differentiation (Shank and Govindearajan, 1993). The charm for differentiation is strong among telecommunication companies, whereby image and perception of quality are important, thus differentiation among telecommunication companies is attained through creating a perception amongst targeted customers where the services offered as a whole are distinct in their own way, importantly by being of a superior quality. At the end, the perception of the offered service allows firms to attach a preferred service fee, with the intention of outperforming their competitors in terms of revenue without the thought of any reduction on costs significantly. The business of a firm can paramountly be illustrated as a value chain activity whereby total revenues minus total costs of all activities carried out to develop and market a product or service yields value (Porter 1980). Firms present in the telecommunication industry have akin internal value chain activities that are marketing and contract management, service provisioning, network infrastructure operations, equipment procurement, service development, billing, developing co-operative agreements and providing customer service.This research was conducted through a case study. This is because it enabled the researcher to have an in-depth understanding of the value addition process in a dynamic telecommunication ecosystem. The main advantage of such a research design is that it can collect a great deal of data about strategic value proposal choices that telecommunication firms have made in reference to the external environment. The data collected was qualitative in nature and the qualitative primary data was collected using an interview guide as an instrument for data collection. A total of seven (7) informers comprising of the heads of departments of the company, selected from various departments such as corporate strategy, operations, finance, human resources, sales and marketing department were interviewed using an interview guide. Secondary data was engaged through questionnaires and review of publications, reports and websites and the data was analyzed using content analysis. The study found out that Safaricom has incorporated abroad range of promotional activities in its marketing programs. Safaricom management has undoubtedly defined its product concept as an objective in customer’s terms in order to deliver the expected value. The study also found out that strategy development process of value chain activities adopted by Safaricom was on financial factors; conducts mid-year and annual reviews of budget and economic forecasts. Financial policy; compiles a list of unfunded/unproductive mandates for legislative review and also it reviews budget process regularly for efficiency. The structure acts as a key determinant of what is appropriate. It directly affects the processes and perspectives of the whole strategy process. Organizations that carry out value chain management practices seriously in their specific organization often aim on improving their performance in terms of higher profits, better responsiveness in the market, and long-term market dominance and long-term competitive advantage. The study recommends that organizations should strive to ensure product range extension, product replacement, product improvement, product repositioning and new product introduction to enable the organization be more productive, ensure fast growth, more investments and better performance.
University of Nairobi