Operations management strategies and mobile phone companies in kenya: a comparative study of safaricom and airtel kenya
Kigo, Catherine W
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In the past few years, the mobile industry has grown steadily outperforming other sections of the Kenya’s economy with an approximate growth rate of 20% annually. However, the industry is dominated by Safaricom with 67.1 per cent market share. The other players in the industry that include Airtel and Orange telecom have been struggling to increase their market share each having 10.8% and 20.2% market shares by end of year 2014. However, Safaricom has continuously innovated and adopted operational strategies that continue to position the firm on top of increase in completion. In response, Airtel has also been adopting operational strategies such as outsourcing in order to gain competitive advantage in market. Though the theories (Stakeholder and Resource Based theory) have tried to establish the core determinants of the types of strategies implemented in the mobile service providers, the studies conducted have shown mixed results as to which management strategies are adopted by organizations. Empirical evidence show that a lot focus has been given to strategies adopted by the mobile service providers. The studies however have not given much emphasis on the operation management strategies as most of the studies have investigated the concept of strategy as a whole. Moreover there is no study that has adopted a comparative approach to determine the operation management strategies adopted by Airtel Kenya and Safaricom. This study sought to bridge this gap by comparing the operational strategies adopted by the firms and whether the strategies account for differences in performance for the firms. This study adopted descriptive research design using a comparative approach in obtaining information about operations management strategies adopted Safaricom and Airtel. The target population of the study comprised of the operation managers of the shops of both Airtel Kenya and Safaricom mobile service providers that are located in Nairobi. The study used primary and secondary data. Primary data will be collected using questionnaires which are chosen due to them being time saving and convenient for obtaining a wide range of information. Data was analyzed analyzed using frequencies, mean and standard deviation. Open ended question on other strategies will be stated and strategies compared between the two firms. To compare and contrast the operation management strategies among the two firms, the key operations management strategies were identified for each firm using the means and compared. Their similarities will be determined using the frequencies and means used. Multiple regression analysis was used to determine the effect of operations strategy on organization performance. Statistical Package for Social Sciences (SPSS) was used to analyze data. The study found that the key strategies adopted by the firms related to product differentiation, supply network, risk management, capacity utilization and to a less extent cost leadership strategy. While the firms were found to have related strategies, the firms differed in the level of adoption of specific strategies. The study also found that operation management strategies affect performance of the firms. Adoption of superior operations management results in increased profits in the mobile company, elevated customer base, influence the effectiveness of the firm’s practices and leads to reduced operations costs of the mobile company. The study recommended that mobile telecommunication firms and other firms in other industries to adopt operations management strategies that are superior in their respective industries and ensure the management should ensure that their firms are leaders in adoption of most efficient strategies.