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Impact of Growth Strategies on Financial Performance of Telecommunication Companies: A Case of Safaricom Plc

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dc.contributor.author Kamau, Ann Wanjiru
dc.date.accessioned 2019-11-13T09:01:27Z
dc.date.available 2019-11-13T09:01:27Z
dc.date.issued 2019
dc.identifier.uri http://erepo.usiu.ac.ke/11732/4963
dc.description A Research Project Report Submitted to Chandaria School of Business in Partial Fulfilment of the Requirement for the Degree of Master of Business Administration (MBA) en_US
dc.description.abstract Once a monopolistic and slowly changing industry, today’s telecommunications industry proves to be dynamic and unpredictable. Telecommunication providers now find themselves in a challenging environment that increasingly requires the management to use growth strategies in order to survive, continue to grow and provide value to shareholders and to customers. The purpose of this study was to determine the impact of growth strategies on financial performance of organizations the focus being on telecommunication companies. This study has used Safaricom Plc. This study was focused on the following specific objectives: Effects of product development strategy on the financial performance of Safaricom Plc, effects of market penetration strategies on the financial performance of Safaricom Plc, and effects of diversification strategies on the financial performance of Safaricom Plc. This study used descriptive research design, it used a population of 100 out of which the stratified sampling was used to select a sample size of 88 respondents. A structured questionnaire was used to collect data and the findings were analyzed through descriptive statistics using; mean and standard deviation while on inferential statistics, correlation and regression analysis were used. Statistical Package for Social Sciences (SPSS) version 22 was used to analyze the data. Upon being analyzed, the data was presented using tables and figures. The first question sought to determine the Impact of growth strategies on the financial performance of telecommunication companies. The findings show that there is a significant relationship between market penetration strategies and the financial performance of a company (0.863); p < 0.05; r (0.583) p < 0.05. The study examined new product development, process and product innovation, mobile money transfers which contributed to the relationship significantly. The second question sought to determine the impact of market penetration strategies on the financial performance of telecommunication companies. The findings show that there is a significant relationship between market penetration strategies and financial performance r (0.744); p < 0.05. The study examined promotion, product pricing, bundle pricing, sales force, strategic distribution reactive and proactive advertising and found that they contribute significantly to financial performance at Safaricom Plc.The third question sought to determine the impact of diversification growth strategies on the financial performance of telecommunication companies. The findings reveal a significant relationship between diversification strategies and financial performance (0.732); p < 0.05.)The study examined diversification strategies such as horizontal product diversification, vertical product diversification, increased product portfolio, alliances and potential partnerships which contribute significantly to the financial performance at Safaricom Plc. This study concludes that new disruptive initiatives and offerings in mobile payment solutions, overdraft solutions, service modifications, e-commerce, home and enterprise solutions impact highly to product development as a growth strategy. This study concludes that promotion, product pricing, bundle pricing, sales force, strategic distribution reactive and proactive advertising contribute to the market penetrations strategies used to increase a firm’s bottom-line. Additionally, this study concludes that horizontal product diversification, vertical product diversification, increased product portfolio, alliances and potential partnerships provide an opportunity for growth of a firm, to conquer new positions and to also take advantage of new opportunities in the market. This study recommends more focus around mobile money payment solutions for Safaricom Plc as it has over the years become the principal driver of profit growth. This study also recommends more resources investment into the Safaricom Plc innovation hub to enable better quality of innovations to be produced; this is guided by data analysis of the consumer trends and what the future of Artificial Intelligence is. This study also recommends promotions that focus on rewarding customer loyalty as this will ensure that customers have a reason to continue using the services and products offered by Safaricom Plc. It also recommends that Safaricom Plc should focus on horizontal product diversification to enable it to spread its risk across a range of products and services. Finally, the study recommends that further studies to be carried out on other growth strategies such as cost leadership, differentiation and product focus. en_US
dc.language.iso en en_US
dc.publisher United States International University - Africa en_US
dc.subject Growth Strategies en_US
dc.subject Financial Performance en_US
dc.subject Telecommunication Companies en_US
dc.subject Safaricom Plc en_US
dc.title Impact of Growth Strategies on Financial Performance of Telecommunication Companies: A Case of Safaricom Plc en_US
dc.type Thesis en_US


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