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Q: Environmental Analyst -(Job D) (Focuses on trends in the six segments of the general environment including technological, demographic trends, economic trends, political trends, social cultural trends, & global trends—See Chapter 2).
Safaricom is the leading mobile provider in Kenya covering over 65% of the mobile subscribers in the country. It has been growing through various strategies including acquisitions and growing service provision like M-pesa services. Five factors have been critical to the success of Safaricom in is service and opportunity provided for Kenyans.
Political Environment/Trends and Legal trends
Kenya has enjoyed a period of peace with all three administrations. There are two periods in the political history of the country that have affected the service provision of the company, the 2007/8 post-election violence and the 2017/2018 electioneering period that lasted for over six months (Mpuga, 2017). The country was polarized, and the company found difficulty making profits especially with the 2017/2018 Safaricom products boycott by the opposition.
The operations of the mobile provider have affected adversely as a result of those actions. The administration of president Uhuru has raised the rates of interests for mobile money services which has affected all providers (Lashitew, van Tulder, &Liasse, 2019). The previous rates stood at 16% and 10% levy, but the government has increased the rated from 10% to 20%, therefore, affecting the profitability of the company.
The current inflation rate of the country stands at 4.14% which is an improvement from 4.7. The country has been growing economically, therefore, making the business environment suitable for the provider. Additionally, the Kenyan shilling over the last few months has been gaining against the dollar. As a result of that, the profitability and returns on investment for the investors has been growing ever since.
Safaricom faces stiff competition from other providers like Telkom and Airtel who have been working hard to increase their market share (Oloko, Anene, Kiara, Kathambi, &Mutulu, 2014). Additionally, the company together with the two competitions made an agreement that allows both customers from either side to send and receive money from the different providers. As a result of that, the company has made more profits through this mobile money service since it has the most significant number of mobile money users.
Technology has played an essential role in the success of the company, the introduction of the mobile money service called M-pesa which allows customers to send and receive money electronically both locally and internationally. Also, the upgrading of their internet network from 2G, 3G and now 4G has increased its market share for customers who want fast internet (Mpuga, 2017). They also have loan facilities and saving facilities that allow their customers to get loans and overdrafts as well as making savings and earning interest.
Safaricom is a firm believer in the empowerment of women both in the place of work and as entrepreneurs. It has been instrumental in offering women employment and other services that help empower women and improve their livelihoods (Beauchesne, Dorion, Griggs, & Harrison, 2014).
It has sponsored projects in the communities where it has helped the youths in employment and creating job opportunities. The cultural landscape of the country is diverse where cities and major towns are metropolitan and have various people. Its services have not been affected by the social structure of communities since all communities use mobile services.
Demographic and Global Trends
Safaricom targets all the populations, adults from the age of 18 years who can register for their services qualify to receive their services. It is distributed across the country in all parts. On a global scale, the company operated in other countries through mobile money services.
Q: Information Specialist. (Job B) (Provides the Background, Mission and Objectives and key issues discussed in the case.
Missions and objectives
Safaricom is a Kenyan company which is prominent in providing mobile services. It has been in the telecommunication market as a public company since 2002. Its mission objective and mission has been to use its ability to deliver innovative and connectivity services in the country. It is geared towards improving the quality of the livelihoods of every individual they are able to reach.
This mission and objective of improving the livelihoods of Kenyans the company has made some steps towards achieving that. For instance, the innovation related to SafaricomMpesa foundation, environmental conservation, and charitable work across communities (Safaricom, 2018). Also through its large market share of about 65%, it is able to provide employment to many young people across the country.
The operations of the company consist of main stakeholder a structure which consists of Vodafone group (40%), Government of Kenya (35%) and free float (25%). The company is also listed in the Nairobi Stock exchange as a telecommunications company with extensive technology innovation (Safaricom, 2018). Safaricom business model consists of core business activities and processes such as consumer business, enterprise business, regionalization, and financial services.
Across the country, Safaricom has over 25 million customers for the data services, mobile and voice services. Also, there are over 200,000 M-Pesa agents, 2,600 locations, suppliers and around 22,000 direct and indirect employees which helps in achieving a business strategy (Safaricom, 2018). This success is enabled by the different marketing strategies that the company has placed in place. For instance, it has diversified its service products such as selling internet, different tariffs in voice and mobile services. On the same point, the business environment Safaricom Company has created include the introduction of Mpesa service.
Mpesa service has been known to be a top-notch initiative which revolutionized the mobile banking business. This was one of the ways that helped Safaricom to achieve competitive advantage from its competitors. Some of the stiff competitors to Mpesa service include Yu Cash, Orange Money and Zap PesaMkononi which are also products of telecommunication companies in Kenya.
In addition, the company’s output and revenue contribution are divided into voice 51.1% M-pesa (23.3%, Mobile data 11.9%, messaging 9.7%, fixed services such a wireless service 2.1% and handset 1.9% (Safaricom, 2018). The main strategy employed by Safaricom that assists in achieving this success is bringing the customer inside the business. This means that they are able to make their customer’s first. This turns out to be a more advanced type of business segmentation which caters for over 25 million customers who have diverse needs and interests.
Safaricom., (2018). Safaricom Sustainable Business report. Retrieved from www.safaricom.co.ke (Links to an external site.)Links to an external site.
Last Updated on March 23, 2019 by EssayPro