Demand for the Product
Safaricom Limited Company is the largest telecommunication industry in Kenya and accounts for almost 8.4% GDP of the country. It has a customer base of around 34.98 million people in Kenya and the entire East African region. The service provider has specialized in a wide range of products and services that include broadband internet, money transfer services, telephony services, banking, voice call services, short messaging, and retail services. Due to the wide range of services and the fact that it was the pioneer telecommunications service provider in the country, the company has enjoyed a massive demand for its products in Kenya and the East African Region. Abdullahi (2010) asserted that Safaricom is also the first company to launch the mobile money transfer service in the world through a service called M-Pesa. It also has banking and credit services through a service known as M-Shwari. These two factors have played a huge role in ensuring that the demand for its product and services all over the region remains steadfast. Their affordable call and SMS rates that come with product promotions have ensured that they build customer loyalty among its consumers hence beating other service providers in the country including Airtel.
Factors That Could Block Success of Innovation
One of the key goals of Safaricom Limited Company is to improve innovation by creating technologies that impact the society positively and transforming the lives of people. One of the most important technologies that have put Safaricom on the global map is the mobile money transfer service. Another technology recently is the installation of the home fiber in residential areas to give its customer an improved experience with the internet. However, certain factors have over the past blocked the success of innovation in the country. Network problems in some remote parts of the country have made it impossible to install technologies such as the home internet. Due to a wide customer base, the money transfer technology sometimes experiences delays hence leading to slower transactions. Thirdly, the cost of starting the money transfer business (M-Pesa) is relatively high leaving it only for the rich who might not be able to open up the business across the entire country.
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Likelihood of Strong Competitive Response
Safaricom Limited Company was the pioneer of the mobile service providers in the country. It was also the inventor of the mobile money transfer service and has since sold it to rival networks such as Airtel under different names. Such factors have made the company to gain a strong competitive advantage over other service providers. It is vital to note that the company owns a market share of over 65% and its next commentator comes at a distance with a paltry 20%, which is Airtel ( Kasyoka, 2011). The likelihood of a strong competitive response is still slim because of its huge customer base, unique services, good customer relation and services among others.
Likelihood That the Potential Competitive Advantage Is Sustainable
The main competitive advantage of Safaricom is the fact that they have remained steadfast in the field of technology and innovation. The company has enjoyed the competitive advantage for over 17 years partly because they were the pioneers in the industry. Safaricom has sold the money transfer services to its main Rival Airtel but still possess the full rights and patents. It has continued to improve in the area of innovation by increasing its money services that include banking, lending, and health insurance services via the M-Tiba. The scope of the money transfer service has been improved and widened to enable sending and receiving money from other networks and also banks. With the company majoring in innovation, there is a likelihood that the competitive advantage is sustainable for the many years to come.
Other Opportunities That Could Be Leveraged
Safaricom has over the past years enjoyed several opportunities that have ensured that it remains a top service provider in the country and the East African region. Leveraging in business involves the utilization of the limited resources in achieving more goals. The money transfer service is one area that Safaricom needs to improve on. The service provider can liaise with other international banks to enable the transfer of money to people living abroad. With its huge following, the company can engage in producing smartphones and other mobile accessories under their brand name. Another vital opportunity that the company can leverage on is internet service. They can connect more homes with their Safaricom home fiber to give its customers a broader experience while dealing with the internet.
Potential Areas Where Damage Could Occur
As a big company with over 30 million subscribers, there are certain loopholes that could cause damage or negativity in service provision. The most recent problem that is being faced by the company is the political influence that has threatened to affect the business severely. One of the leading political parties in the country has singled out the company for allegedly having helped the ruling coalition in perpetrating electoral fraud in the country. In turn, the political outfit has asked its members to boycott the service providers and migrate to their rivals, Airtel. The company through its officials has already begun complaining that the move would likely implicate the company negatively leading to major losses. The use of home internet fibers could also result in major losses especially where they bring the service to people who are likely to migrate or move from their premises to others frequently.
The Strategic Grid Planning Process
The grid has four quadrants that attempt to determine how the management feels the current IT systems influence the company. The grid also postulates how the future IT developments will impact the sustainability of the business. The quadrant that best applies to the Safaricom Limited Company is fourth quadrant (quadrant 4). In the quadrant, the influence of the IT system is vital in the current development of the company and even required more in the future. The mission of IT is described as extensively crucial. Currently, the IT innovations are required to be at their best to ensure that the money transfer services are efficient and fast as pointed out by Kesenwa et al . (2013). A proper IT system is also required to get in touch with the customer care providers who are important in solving problems relating to the customer. Information and technology will ensure that the network services are at their optimum hence ensuring that calls, SMS, and internet services have an uninterrupted flow which is vital in fostering customer loyalty. An improved IT system will improve the storage of data regarding clients and also registration processes that involve new and old customers will be carried out more efficiently.
The fourth quadrant is also critical with the kind of satisfaction that an IT system can cause on a company. With regards to Safaricom, a steady and improved IT system will ensure that the money transfer system improves on its transactions and also widen its scope to enable transfer of money to foreign countries. An IT system will enable better storage of data in the future to ensure that fraudsters and imposters are caught up with. In general, an improved IT system will increase its competitive advantage and hence increase customer loyalty in the face of competition from other service providers.
References
Abdullahi, S. A. (2010). Operations strategies used in mobile banking: the case of M-Pesa service by Safaricom limited (Doctoral dissertation, University of Nairobi, Kenya).
Kesenwa, A., Oima, D. O., & Oginda, M. (2013). Effects of Strategic Decision Making on Firms Performance: A Case Study of Safaricom Limited, Nairobi, Kenya. International Journal of Business and Social Science , 4 (13).
Kasyoka, G. M. N. (2011). The use of strategic positioning to achieve sustainable competitive advantage at Safaricom Limited. Unpublished MBA project, School of Business, University of Nairobi , 3(11).
