Safaricom Limited is considered to be the leading mobile network operator that is found in Kenya. The company was formed in the year 1997 as a subsidiary of Telkom Kenya, which owned it fully. However, in the year 2000 Vodafone Group Plc that is the United Kingdom took the management responsibility and 40% stake in the company. From its formation, the company has been able to be successful through proper strategy formulation.
Establishing Long-term Goals and Objectives
Safaricom Limited operates in a competitive market where there are other mobile network operators such as Telcom. To make sure that it remains competitive, the company needs to establish long-term goals and objectives such as building long-term relationships with the customers. However, to be successful, it is vital to ensure that there is strategy formulation.
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Strategy Formulation
Strategy formulation is considered to be the process where the organization chooses the best action that would help in achieving the set goals ( Hitt, 2016) . Strategy formulation at Safaricom involves the top decision-makers in the company and considers the changing environment and any possible change in the future.
Markets
The company will pursue different markets that include financial services, telephony, and broadband internet markets. The unique value that it will offer in the financial services is the ability for customers to transact on their mobile devices. In the broadband internet market, the unique value that is provided is a fast and affordable internet connection. Finally, the company considers affordability in the telephony market as its unique value. Considering the fact that the company is already established in these markets, the resources needed is not much because it only needs an additional employee in its marketing team. It is worth noting that the company is operating in a very competitive market where customers can easily switch to substitute products which are provided by competitors. Therefore marketing is vital in attracting new customers and maintaining the existing ones.
Value
Value creation is vital in making sure that the company remains sustainable over a long period. The company can capture value by understanding the needs of the consumers and finding ways of fulfilling them. However, it is also vital for the company to find ways of sustaining its competitive advantage over time considering the fact that it is operating in a competitive environment. The company can sustain its competitive advantage through the cost leadership strategy where it can provide its products and services at a lower cost as compared to the competitors such as lowering the calling costs so that it can be a low-cost leader. However, for this strategy to be successful, the company needs high investment so that it can achieve economies of scale.
The second way in which it can achieve its competitive advantage is by differentiating its products and services from those of other companies through their unique benefits and features ( International Conference on Knowledge Management in Organizations, 2015) . Differentiation will help the company to develop products and services that are perceived by the customers as being unique in the industry. However, to succeed in this strategy, it is vital for the company to invest in product development, marketing, and extensive research to sustain leadership.
Business Management Strategy
The business management strategy includes strategies that are undertaken by businesses so that they can attain an efficient business management ( Simerson, 2011) . In the case of Safaricom Limited, the best strategy include cost leadership which has the advantage of increasing the number of sales as more customers are attracted to buy the goods and services. The second strategy is differentiation which has the advantage of making the products unique from those of the competitors’. The main corporate strategy that is adapted by Safaricom is differentiation which is based on three strategic objectives that include providing relevant products, putting the needs of the customers first, and aspiring to be the best in the market.
The company’s vertical integration is seen where it provides network and internet services and at the same time acts as a supplier for mobile and computer devises. In other words, the supply chain of the company is owned by the company. In addition, it enjoys strategic alliances with the government as it owns some shares in the company. The alliance gives the company some advantage in terms of helping Safaricom be in compliance with the law. The strategic alliance also provides a competitive advantage to the company. The company also enjoys a competitive advantage from the fact that it has a good reputation in the market and is known by a majority of people. In addition, considering that it is a big company, Safaricom has the necessary resources in terms of finances and technology that help it to provide cheaper products and services as compared to the competitors. Its big size is evident from the organizational chart below. The organizational chart starts from the board of directors who oversee the work of the managers on behalf of the stakeholders of the company.
Board of Directors
CEO
Directors
Regional Managers
Functional Managers
Operational Employees
Conclusion
Safaricom Limited is the leading mobile network operator that is found in Kenya. It evidently operates in a competitive market where there are other mobile network operators such as Telcom. To make sure that it remains competitive, the company has seen the importance of establishing long-term goals and objectives such as building long-term relationships with the customers. Strategy formulation at Safaricom has helped the company remain competitive in the market by differentiating itself and being a cost leader.
References
Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2016). Strategic Management . Boston, MA: Cengage Learning.
International Conference on Knowledge Management in Organizations, In Uden, L., In Heričko, M., & In Ting, I.-H. (2015). Knowledge management in organizations: 10th International Conference, KMO 2015, Maribor, Slovenia, August 24-28, 2015, Proceedings .
Simerson, B. K. (2011). Strategic planning: A practical guide to strategy formulation and execution . Santa Barbara, Calif: Praeger.
