Effect of Digital Transformation on Competitive Advantage of Telecommunication Firms in Kenya

Abstract

The general objective of the study was to determine the effect of digital transformation on the competitive advantage of telecommunication firms in Kenya. The study specifically sought to determine the effect of digital products and services on the competitive advantage of telecommunication firms in Kenya, investigate the effect of digital operation processes on the competitive advantage of telecommunication firms in Kenya and to determine the effect of digital talent creation on the competitive advantage of telecommunication firms in Kenya. This study adopted the descriptive research design. The target population of the study were the 60 licensed telecommunication firms operating in Kenya. A census of the 60 telecommunication firms was conducted. Primary data collection method was adopted in the study. Therefore, the study adopted a structured questionnaire to collect data. The data was summarized using descriptive statistics such as frequencies, percentages, mean, and standard deviation and inferential statistics including correlation and regression statistics. Tables and figures were used to present the analyzed data. The results of the study showed that digital products and services had a strong, positive and statistically significant relationship with the competitive advantage of the telecommunication firms in Kenya r (51) =0.620, P=0.000<0.01. Furthermore, the regression results indicated that digital products and services explains to a tune of 38.4% of the total variations in competitive advantage of the identified telecommunication firms in Kenya (R2=0.384). The analysis of variance (ANOVA) results pointed out that the model is statistically significant at 1% level of significance as provided for by an estimated P value in the model (0.000<0.01). This was further supported by the estimated F value in the model, 30.604> 2.79107(F1, 49) from the F tables. Finally, digital products and services could statistically and influence the competitive advantage of the telecommunication firms in Kenya (β = 0.062, t (51) = 5.532, p<.01). Further results indicated that digital talent creation had a strong, positive and statistically significant relationship with the competitive advantage of the telecommunication firms in Kenya r (51) =0.585, P=0.000<0.01. Furthermore, the regression results indicated that digital talent creation explains to a tune of 34.2% of the total variations in competitive advantage of the identified telecommunication firms in Kenya (R2=0.342). The analysis of variance (ANOVA) results pointed out that the model is statistically significant at 1% level of significance as provided for by an estimated P value in the model (0.000<0.01). This was further supported by the estimated F value in the model, 25.507> 2.79107(F1, 49) from the F tables. Finally, digital talent creation could statistically and influence the competitive advantage of the telecommunication firms in Kenya (β = 0.585, t (51) = 5.05, p<.01). Finally, the findings further pointed out that digital operation processes had a strong, positive and statistically significant relationship with the competitive advantage of the telecommunication firms in Kenya r(51)=0.593, P=0.000<0.01. The regression results indicated that digital operation processes explains to a tune of 34.2% of the total variations in competitive advantage of the identified telecommunication firms in Kenya (R2=0.351). The analysis of variance (ANOVA) results pointed out that the model is statistically significant at 1% level of significance as provided for by an estimated P value in the model (0.000<0.01). This was further supported by the estimated F value in the model, 26.515> 2.79107(F1, 49) from the F tables. Finally, digital operation processes could statistically and influence the competitive advantage of the telecommunication firms in Kenya (β = 0.593, t (51) = 5.149, p<.01). The study concludes that digital products and services have a positive and significant effect on the competitive advantage of the telecommunication firms in Kenya and thus an improvement in the digital products and services will yield a significant improvement in the competitive advantage of the telecommunication firms identified in the study. In addition, digital talent creation has a positive and significant effect on the competitive advantage of telecommunication firms in Kenya. Finally, the study concluded that digital operation processes has a significant and positive effect on the competitive advantage of the telecommunication firms in Kenya. The study recommends that telecommunication firms in Kenya should strive to continuously improve on the quality and quantity of the digital products and services they offer in their telecommunication market. Firms should also recognize the creative employees who are able to come up with ideas that are able to propel the firm and enhance its competitive advantage. The recognition could be in the form of protecting their intellectual rights as well as enhancing their remuneration. Finally, firms should strive to fully automate their businesses to enhance their competitive advantage. Automating business operations increases efficiency in decision-making, decision-making, leadership, training, rewards system and management involvement.