Started in 1993 as a Kenyan government’s organization, the company has been in operation
for two and a half decades, and has since increased in size to employ more than 6000 employees
to aid in its service delivery. The company’s products are primarily focused on telecommunication
services, including voice, data, and mobile money transfer services. Notably, the company has in
period of operation achieved much influence and success within the Kenyan telecommunication
market, some of which has involved its Initial Public Offering in 2008, in which the government
auctioned off 25% of its 60% share of the company. Ultimately, this made Vodafone the majority
shareholder in the company, with 40% of the company’s stocks.
Barriers and Opportunities
Essentially, the Safaricom Company operates within the Kenyan market, in which
significant opportunities for growth in the telecommunication industry exist. The economy is
classified as a developing economy, which infers the existence of significant chances of business
investment. Further, with the consistently increasing use of mobile money, the opportunities of
success continue to increase due to the chances of investment in the rural areas within the country.
However, barriers also exist, particularly due to economic volatility within the country, particularly
due to current cases of corruption. This acts as a barrier to the prospects of future success,
particularly with challenges related to changes in taxation for companies as successful as
Strengths and Weaknesses
Notably, Safaricom controls a significant market share of the country’s telecommunication
industry, which has long been a strength for the company. The market share has always influenced
the economies of scale for the company, which has in turn helped Safaricom make investments in
other areas such as 4G technology way ahead of the company’s competitors. In addition,
significant levels of innovation and control of a vast share of the mobile money transfer market
has offered the company significant strengths against its less reputable competitors. Further, the
company’s brand name has often shielded the company from price wars within the industry,
ensuring that it maintains its revenue levels irrespective of challenges from its competitors.
Nonetheless, the company’s possible future serves as one of its weaknesses, particularly
due to possibilities of change in its leadership. Notably, Safaricom has had two notable names as
its leaders for the larger part of the twentieth century, which makes one question the possible effect
of change in the company’s leadership in future (Susan, 2016). Businesses are bound to undergo
significant changes throughout the business cycle and the contemporary Safaricom experience
could be a result of the business’ stage in its cycle (Maćkowiak & Wiederholt, 2015). Therefore,
one may find it hard to determine the company’s possible future absolutely.
Irrespective of the challenges, the company enjoys competitive advantage from its
performance within the telecommunications industry, and the significant control of the market
share therein. Under different circumstances, it could have been possible to indicate possible loss
of the market to its competitors in the Kenyan market. However, the brand has managed to
maintain its position within the industry due to it is strong brand name and convenience provided
by its widespread reach within the Kenyan market.
Additionally, the national culture within the Kenyan market has served to propel success
of the Safaricom Company, particularly with its mobile money transfer market. Notably, majority
of Kenyans are low to medium income earners, which makes the financial transactions relatively
more informal than the case would be in the event of a more developed economy. Therefore, the
high dependence on informal cash transfers has often prompted people to use the mobile money
transfer platforms, with M-pesa’s convenience capitalizing on the culture w9ithin the Kenyan
In addition, the company’s strategies primarily involve availing as much resources and
infrastructure for effective performance throughout the country as possible (Beauchesne. Dorion,
Griggs, & Harrison, 2014). This has positively impacted the company’s reach, to the extent of
promoting the ease with which consumers access the services. Consequently, Safaricom has the
best infrastructure within the telecommunications market compared to its competitors, which has
also always served to promote confidence among consumers, to the extent that they end up
preferring Safaricom products to those of its competitors.
In essence, Safaricom’s focus on investment in infrastructure, mobile money transfer, and
high speed data transfer have been some of the most strategic aspects leading to the company’s
continued success within the Kenyan market. These strategies shave been effective enough in
maintaining the company’s business leadership position by reducing the possible threats of irs
competitors. Notably, Safaricom enjoys sizeable control of the market share which in turn
translates to greater economies of scale and a higher revenue available for various innovation and
expansion projects. Ultimately, the company has always been in a position to leverage these
strengths and ensure continued control of the Kenyan telecommunication market by increasing the
cost that its competitors would incur if they wished to be as successful as Safaricom. In essence,
the strategy has been enough in increasing the market entry barrier based on the cost of investment
for significant success within the industry.
Beauchesne, L., Dorion, N., Griggs, N., & Harrison, J. S. (2014). Safaricom: Innovative Telecom
Solutions to Empower Kenyans.
Maćkowiak, B., & Wiederholt, M. (2015). Business cycle dynamics under rational
inattention. The Review of Economic Studies, 82(4), 1502-1532.
Susan, N. (2016). Influence of Transformational Leadership on Employee Performance. A Case
Study of Safaricom Limited. Strategic Journal of Business & Change Management, 3(2),
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