Determinants of competitive advantage of firms in the telecommunications industry in kenya.

ABSTRACT

The Telecommunications industry in Kenya is full of competition. The companies currently present include Safaricom Kenya Limited, Airtel Networks Kenya Limited, Telkom Kenya Limited (Orange), Essar Telcom Kenya (YU) and lately, Equity Bank Limited with the Equitel money. This study sought to evaluate the determinants of competitive advantage for firms within the Telecommunications industry in Kenya. The objectives of the study were to find out the effect of innovation on competitive advantage, to establish how staff training is a determinant of competitive advantage, to determine the extent to which customer orientation is a determinant of competitive advantage, and to examine the effect of stakeholder involvement on competitive advantage. The study discusses the concept of competitive advantage and its sources, gives an overview of the Telecommunications industry in Kenya and that of Safaricom Kenya limited and its organization. The study also reviews some of the theories of competitive advantage and discusses key determinants of competitive advantage that is innovation, staff training, customer orientation and stakeholder involvement. It also gives a conceptualization of how innovation, staff training, stakeholder involvement and customer orientation contribute towards a competitive advantage. The respondents that were targeted by the study were the divisional and functional leaders at Safaricom Limited. The target population was 90 subjects from which a sample of 40 % was drawn using stratified sampling. Questionnaires were used to collect data after being pilot tested. Validity and reliability testing was done to evaluate for internal consistency among variables. Data was analyzed using statistical package for social sciences. Qualitative data was analyzed using thematic and content analysis. The results have been presented in a narrative format. The study established that Safaricom is a market leader in the telecommunication industry in Kenya. It also established that innovation, staff training, customer orientation and stakeholder involvement are major determinants of competitive advantage for firms. The study therefore concludes that organizations should pay special attention to these factors in order to maintain competitive advantage.