Effects of competitive strategies on financial performance of telecommunication companies in Kenya during the Covid-19 pandemic. A case of Safaricom PLC

Abstract

The challenges of the business setting during the Covid-19 pandemic across the globe forced several businesses to scrutinize their competitive strategy more closely. The objective of this study was to establish the influence of competitive strategies on the financial performance of telecommunication companies in Kenya using Safaricom PLC as a proxy. The specific objectives of the study were to determine the influence of cost leadership, the differentiation, focus, and strategic alliance on the financial performance of telecommunication companies in Kenya. The study used a cross-sectional design involving the management staff of Safaricom PLC. The target population was 650 employees of Safaricom head office. The sample size was 248 employees of Safaricom PLC. The study was guided by resource base view theory, and Porter's 5 force theory. The research collected primary data using a questionnaire which was administered to each member of the sample, a pilot study was carried out to pretest and validate the questionnaire before being administered. Both descriptive and inferential statistics were used to analyze data collected. The data collected was then analyzed using Statistical Package for Social Sciences (SPSS) version 24 using descriptive statistics such as means, standard deviation, frequency and percentage regression analysis were conducted, Anova test was carried out for hypotheses testing to establish the best model of the study. Tables and graphs were used to present, summarize, and organize data. For inferential analysis was used to measure the strength of the relationship between differentiation, focus, cost leadership, strategic alliance, and organizational financial performance. Additionally, regression analysis was used to establish the nature of the relationship between dependent and independent variables. The study found that coefficients of all the independent variables were positive and statistically significant. The study found cost leadership to take the lead as the most significant variable for customer satisfaction (β = 0.677, p = 0.000). Strategic alliance was the least significant variable for the study (β = 0.049, p =0.013). The ANOVA F test p value was less than 0.05 to indicate that the overall model was significance. The analysis also indicated that the study variables were predictors of financial performance. The study concluded that all the four independent variables of the study should be considered in the decision making of the company. The study recommends that Safaricom PLC should strive to focus on the cost leadership requirements and continuous improvement to gain profits for inferential analysis was used to measure the strength of the relationship between differentiation, focus, cost leadership, strategic alliance, and organizational financial performance. Additionally, regression analysis was used to establish the nature of the relationship between dependent and independent variables. The study established that Safaricom PLC Practices namely cost leadership, differentiation, focus differentiation and strategic alliance jointly had a significant influence on the financial performance. The study concluded that Safaricom PL based in the Nairobi County should focus of all the four objectives to enhance their competitiveness over competitors. The study recommends further research should be conducted in this area since the current study was conducted during the COVID- 19 pandemic era, which affected data collection process.