Safaricom Limited Dilemma as Competitors Cash In
Introduction
Within the corporate goals, to lead or take the advantage among the other competitors is one of the best attribute that an organization can earn the loyalty of the market. However, this goal is postponed by the growing numbers of competitors that are apparently offering the same kind of service but having various approaches. If the organization sticks on the traditional business cycle and did not improved, the aim to gain advantage appears to be a distant dream. The same case is also true like among the technological incorporated organizations.
Background and Problem Statement
SAFARICOM LTD is the leading provider of communications services in Kenya, offering cellular network access and business solutions. SAFARICOM LTD was formed in 1997 and in May 2000, Vodafone group Plc acquired a stake and management responsibility for the company. The Company has since emerged as one of the fastest growing companies in Kenya. The Company is still aggressively expanding the market network throughout the country and developing strategic business relationships with leading global telecommunication players which help in ensuring that Safaricom has access to the world’s latest technology to maintain its market leadership. Safaricom is proud to be the market leader in offering innovative products like M-PESA to the Kenyan people to enhance their lifestyle and their way of efficiently doing business. During the last six months we have introduced our Hot Spot range of products, including 3G routers for our business customers and prepay modems, both utilising our exclusive 3G network, enabling all our customers to have high speed access to their email and the internet (www.safaricom.co.ke). However, due to the growing rivals in and outside the African continent, the telecommunications company finds itself in peril. Therefore, what strategies are applicable to be engaged with to save an organization that has reached the decline stage due to stiff competition, in a developing nation?
Research Aim and Objectives
The main aim of the study is to investigate the relative strategies that can be applied in the Safaricom to maintain its competency. In order to capture the essential information needed in the study, there are objectives that should be considered. First is to recognize the strategies of the Safaricom in the recent level of competition. Second is to compare the applied strategies with the strategies of the competitors. Third is to describe the perceptions of the telecommunication users. And fourth is to determine the action of Vodafone to support the performance of the Safaricom.
Literature Review
There are challenges that marketers encounter when identifying potential market segments and the subsequent development of marketing strategies needed to serve the selected market segments. In the Safaricom case the problem is compounded because firstly, the managers are all new to the environment and secondly, the significant market indicators point to a dismal market potential for mobile phones in Kenya. The telecommunications infrastructure and situation in Kenya before October 2000 shows a struggling industry that is dominated by a public monopoly, Telkom Kenya. Michael Joseph, the new CEO of the newly privatized Safaricom and his management team, are confronted with strategic and operational decisions needed to prepare the company to make a debut in Kenya’s mobile telephone market. The new management team must make business and marketing strategy decisions that would make Safaricom achieve superior customer value and rapid market acceptance. The team must make decisions on the target market; market coverage; payment option; type of customer service; types of phones to be offered etc. with very limited market information, a situation which is often encountered when making investment decisions in developing country environments (Mayaka, 2006). However, Safaricom demonstrates that the private sector has significant and unique abilities to enhance the effectiveness of emergency response, and more importantly they can do so while maintaining their core business principles and demonstrates how technology can empower poor, marginalised and vulnerable people (Datta, Ejakait, & Scriven, 2008).
Methodology
The applied method in the study is through the use of secondary information and survey. The secondary information can give the study the opportunity to assess and review the literature in the telecommunications industry in Kenya, in particular and related to the contemporary behavior and strategies of the telecommunications companies. The materials that can be used are the wide ranges of case studies, academic contexts, industry reports, and others. Meanwhile, the survey will use the Likert Scale form of questionnaire and the participants will be the consumers of telecommunications services. In this way, the study can determine the perceptions of the people regarding to the services offered by Safaricom and its rivals.
References:
Datta, D., Ejakat, A., &Scriven, K., (2008) Cash Transfers through Mobile Phones: An Innovative Emergency Response in Kenya, ALNAPInnovations [Online] Available at: http://www.alnap.org/pool/files/innovationcasestudyno1-concern.pdf [Accessed 29 September 2010].
Mayaka, C., (2006) Safaricom Limited (A): Crafting Business and Marketing Strategy for a New Market, United States International University [Online] Available at: http://www.usiu.ac.ke/gbsn/old_gbsn/SUMMARY%20OF%20USIU-GBSN%20CASE%20STUDIES_FY%202004-2005.pdf [Accessed 29 September 2010].
Safaricom [Online] Available at: www.safaricom.co.ke [Accessed 29 September 2010].
Credit:ivythesis.typepad.com
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