The Effect Of Business Strategy Implementation On Competitive Advantage Of Payment Service Providers In Kenya

Abstract

In developing countries like Kenya, the competitive advantage of Authorized Payment Service Providers such as Safaricom is being threatened by rival firms, leading to instability. Recent data from the Communication Authority of Kenya (CAK) reveals a significant loss of market share for Safaricom and Equitel, with Airtel Kenya's presence growing steadily. Kenya relies on a vibrant and competitive payment service provider sector to foster economic growth, underscoring the importance of conducting the present study. Thus, the purpose of the study was to establish the effect of business strategy implementation on competitive advantage of payment service providers in Kenya (PSPs). The specific objectives of the study were: to determine the effect of organizational structure on competitive advantage of payment service providers in Kenya, establish the effect of strategic leadership on competitive advantage of payment service providers in Kenya, analyze the effect of resource allocation on competitive advantage of payment service providers in Kenya and assess the effect of strategy monitoring and control on competitive advantage of payment service providers in Kenya. The study was guided by the resource-based view theory and the resource dependence theory. Descriptive correlational survey design was adopted targeting the authorized payment service providers in Kenya as the unit of analysis and census was adopted. Information in its primary form was gathered with the aid of the questionnaire which shall have standardized items designed on a 5-point Likert scale. The analysis of the obtained information was aided by SPSS version 25 and presentation was done by tables and graphs. The findings of the study were expected to shed more light on how sound and effective implementation of business strategies can enhance competitive advantage of the firm. The study established that organizational structure (β=0.571, p=0.017), strategic leadership (β=0.427, p=0.001), resource allocation (β=0.520, p=0.011) and strategy monitoring and control (β=0.142, p=0.030) had positive and significant effect on competitive advantage. It was concluded that strategy implementation is a driver of competitive advantage. The study recommended that managers working with the authorized payment service providers in Kenya should strengthen their existing structures and systems by increasing the degree of formalization, decentralization so as to promote free flow of information and ideas between employees. The management team working with the authorized payment service providers in Kenya should enroll in short term courses to acquire more skills and knowledge in regard to strategic leadership. The finance managers working with authorized payment service providers in Kenya should allocate adequate financial resources in supporting the financing of viable investment projects. The monitoring and evaluation team working with the authorized payment service providers in Kenya should play an active and central role in guiding the regular monitoring, review and control of the formulated strategies.