Influence of diversification on the competitiveness of Safaricom (k) ltd

Abstract

The operating environment for business has become very volatile and dynamic following increased innovation and globalization. This has meant that organizations have to constantly be ready to develop and implement new strategies that would boost their competitiveness. One of the strategies that companies have adopted is diversification wherein a company tries to increase profitability through increased sales volume from new products and new markets. The purpose of this study was to establish the influence of diversification strategies on the competitiveness of Safaricom (K) Limited. The research used a case study approach to give an in-depth understanding of the diversification as a competitive strategy by Safaricom Company Limited in Kenya. Primary data was collected from 5 senior managers using an interview guide and data collected was analysed using content analysis. Data was then organized into various thematic areas so as to build a profile on how Safaricom Limited has used diversification as a competitive strategy and a report generated to show how successful Safaricom has applied diversification strategy as a competitive strategy. The study established diversification had been a key factor in the success of Safaricom and that the innovative culture within the organization had highly contributed to the success of the diversification strategy. The study also established that through diversification, the company has been able to increase its revenue streams and hence increased profitability. This study concluded that one of the contributing factors to the success had been diversification. The innovative culture within the organization had highly contributed to the success of the diversification strategy where new products and services that appeal to their customers have been launched to suit different market segments. It was also concluded that through diversification, the company had been able to increase its revenue streams and hence increased profitability. The study recommends that the company should continuously review its diversification strategies guided by the market dynamics so as to stay ahead of competition and that the company should continuously encourage innovation among its employees by reward innovative ideas. The respondents were reluctant to give information on strategy since it is at the core of design of the future of an organization and creating a competitive advantage over competitors. The researcher proposed that further studies ought to be carried out to investigate the relationship between innovation and the success of diversification strategies. Moreover, a more detailed study needs to be carried out to investigate the influence of diversification strategies amongst other telecommunication companies in Kenya.