relationship between selected strategic factors …
TRANSCRIPT
RELATIONSHIP BETWEEN SELECTED STRATEGIC
FACTORS AND COMPETITIVE ADVANTAGE; A CASE OF
SAFARICOM PLC, IN KENYA
BY
ANGELA A. OKOTH
UNITED STATES INTERNATIONAL UNIVERSITIY –
AFRICA
FALL 2020
RELATIONSHIP BETWEEN SELECTED STRATEGIC
FACTORS AND COMPETITIVE ADVANTAGE; A CASE OF
SAFARICOM PLC, IN KENYA.
BY
ANGELA A. OKOTH
A Research Project Report Submitted to the Chandaria School
of Business in Partial Fulfillment of the Requirement for the
Degree of Masters in Business Administration (MBA)
UNITED STATES INTERNATIONAL UNIVERSITIY –
AFRICA
FALL 2020
ii
STUDENT’S DECLARATION
I, the undersigned declare that this research project is my original work and has not been
submitted to any other institution of higher learning for academic credit other than at the
United States International University- Africa
Signed: ____________________________ Date: __________________________
Angela Awuor Okoth (ID 615194)
This project has been submitted for examination with my approval as the appointed
supervisor.
Signed: ____________________________ Date: ____________________________
Dr. Veronica Kaluyu
Signed: ____________________________ Date: ____________________________
Dean, Chandaria School of Business
iii
COPYRIGHT
© 2020 Angela Awuor Okoth
All rights reserved. No part of this project report may be photocopied, recorded, or otherwise
reproduced, stored in a retrieval system or transmitted in any electronic or mechanical means
without prior permission of the United States International University – Africa or the author.
iv
ABSTRACT
Organizations are becoming more devoted in identifying strategic factors that can enhance
their competitive advantage. The main aim of this study was to assess whether a relationship
existed between selected strategic factors and the competitive advantage at Safaricom Plc.
The study specifically investigated the relationship between innovation and competitive
advantage, the relationship between organizational resources and competitive advantage and
the relationship between organizational capabilities and competitive advantage.
The research adopted a correlation and descriptive survey design. The target population of
the study was 800 employees based in the enterprise division at Safaricom. A sample size of
267 was identified using random stratified sampling, the sample size included top, mid-level
and non-managerial staff. Data was collected using a questionnaire. Reliability of the
research instrument was determined using Cronbach Alpha and a value of r=0.7 was
accepted. The quantitative data collected was analyzed using Statistical Package for Social
Sciences (SPSS) version 23 for descriptive and inferential statistics. Analysis of the
background information was carried out using descriptive statistics and the testing of the
hypothesis was carried out using correlation and bivariate regression analysis. A 95%
confidence level was accepted with an error of margin of 5%. Data was presented using
tables and figures.
The findings for the first objective indicated that there was a statistically significant and
positive relationship between innovation and competitive advantage which implied that an
increase in innovation at Safaricom would translate into an increase in competitive
advantage. With the staff agreeing that product, process and market innovation contribute
positively to an organization achieving its competitive advantage. Results for the second
objective demonstrate that organizational resources have a statistically significant and
positive relationship with competitive advantage. These findings implied that efficient use
of the company’s organizational resources enhanced the competitive advantage of the
organization. Findings for the third objective revealed that there was a statistically significant
and positive relationship between organizational capabilities and competitive advantage.
The findings highlighted that an organizations capability if properly identified and utilized
can positively enhance the organizations competitive advantage. In view of the general
v
objective, the study noted that the selected strategic factors of innovation, organizational
resources and organizational capabilities have significant influence on the competitive
advantage at Safaricom.
The study concluded that innovation is an important strategy for ensuring the
competitiveness of organizations at the marketplace. The three dimensions of innovation in
this case include product innovation that helps the company to address the needs of the
various specific market segments; process innovation that helps the company to make
affordable products for markets and market innovation that helps the company to understand
their markets better, increase the demand for their products and services. The study also
concluded that organizational resources are critical predictors of competitiveness of
organizations in the marketplace. The dimensions of organizational resources include
intellectual property, which enable the company to create innovative products that uniquely
address their needs; organizational culture that company’s leverage on to achieve
collaboration that to the of services that are differentiated by quality delivery and uniqueness
at the marketplace, and brand equity that is used to create develop strong brand associations
that result in market niches. Furthermore, the study concluded that organizational
capabilities influence the competitiveness of organizations at the marketplace.
Organizational capabilities manifest through dimensions such as customer service, which
enhances enhance service performance leading to customer satisfaction; knowledge
management that leads to the production of unique and competitive product and services,
and distribution networks that timely delivery of goods and services thereby responding to
customers’ needs in a timely manner.
Therefore, the study recommended that the management at Safaricom should keep on
investing and improving on their innovation function. They will need to optimize the
efficient use of their organizational resources and capabilities so as to achieve a competitive
advantage. The study recommended that Safaricom Plc. further develops its organizational
capabilities in terms of customer service, knowledge management, and distribution networks
as a means of assuring its continued competitiveness in the marketplace. Furthermore, the
study recommended that future studies be conducted on organizations in other economic
sectors other than telecommunication to find out if the findings of the study can be
generalized to them as well.
vi
ACKNOWLEDGEMENT
I would like to acknowledge and appreciate the Almighty God for the strength he has
provided me throughout the period of this study. Secondly, I would also like to sincerely
thank my supervisor Dr. Veronica Kaluyu for her intellectual contribution, guidance, and
support in developing this research. My gratitude also goes to the respondents at Safaricom
Kenya for giving me the valuable information needed to develop this study. Finally, to my
parents and siblings for their patience, support, encouragement, love and understanding
during the process.
May God bless and reward you all.
vii
DEDICATION
I dedicate this research project to my parents Drs. F. A. Okoth and U.A. Okoth and my
siblings Vincent, Nicholas, Carol, Janet, Valerie for their support during the entire process
viii
TABLE OF CONTENTS
STUDENT’S DECLARATION ...................................................................................... ii
ABSTRACT ................................................................................................................... iv
ACKNOWLEDGEMENT ............................................................................................. vi
TABLE OF CONTENTS ............................................................................................. viii
LIST OF TABLES ......................................................................................................... xi
LIST OF FIGURES ...................................................................................................... xii
LIST OF ABBREVIATIONS ...................................................................................... xiii
CHAPTER ONE ..............................................................................................................1
1.0 INTRODUCTION ......................................................................................................1
1.1 Background of the Study ..............................................................................................1
1.2 Statement of the Problem .............................................................................................5
1.3 General Objective ........................................................................................................6
1.4 Specific Objectives ......................................................................................................6
1.5 Justification of the Study ..............................................................................................6
1.6 Scope of the Study .......................................................................................................7
1.7 Definition of Terms ......................................................................................................7
1.8 Chapter Summary ........................................................................................................8
CHAPTER TWO .............................................................................................................9
2.0 LITERATURE REVIEW ..........................................................................................9
2.1 Introduction .................................................................................................................9
2.2 Relationship between Innovation and Competitive Advantage......................................9
ix
2.3 Relationship between Organizational Resources and Competitive Advantage............. 13
2.4 Relationship between Organizational Capabilities and Competitive Advantage .......... 17
2.5 Chapter Summary ...................................................................................................... 22
CHAPTER THREE ....................................................................................................... 24
3.0 RESEARCH METHODOLOGY ............................................................................ 24
3.1 Introduction ............................................................................................................... 24
3.2 Research Design......................................................................................................... 24
3.3 Population and Sampling Design ................................................................................ 24
3.4 Data Collection Methods ............................................................................................ 26
3.5 Research Procedures ................................................................................................. 27
3.6 Data Analysis Methods .............................................................................................. 30
3.8 Chapter Summary ...................................................................................................... 31
CHAPTER FOUR.......................................................................................................... 32
4.0 RESULTS AND FINDINGS .................................................................................... 32
4.1 Introduction ................................................................................................................ 32
4.2 General Information ................................................................................................... 32
4.3 Innovation and Competitive Advantage ...................................................................... 36
4.4 Organizational Resources and Competitive Advantage ............................................... 41
4.5 Organizational Capabilities and Competitive Advantage ............................................ 46
4.6 Chapter Summary....................................................................................................... 52
CHAPTER FIVE ........................................................................................................... 53
5.0 DISCUSSION, CONCLUSION AND RECOMMENDATIONS ....................... 53
5.1 Introduction ................................................................................................................ 53
5.2 Summary .................................................................................................................... 53
x
5.3 Discussion .................................................................................................................. 55
5.4 Conclusion ................................................................................................................. 61
5.5 Recommendations ...................................................................................................... 63
REFERENCES .............................................................................................................. 64
APPENDICES ................................................................................................................ 72
APPENDIX I: LETTER OF INTRODUCTION .......................................................... 72
APPENDIX II: QUESTIONNAIRE ............................................................................. 73
APPENDIX III: USIU LETTER ................................................................................... 83
APPENDIX IV: NACOSTI PERMIT ........................................................................... 84
xi
LIST OF TABLES
Table 3.1 Population Distribution..................................................................................... 25
Table 3.2 Distribution of Sample Size .............................................................................. 26
Table 3.3 Reliability of Innovation Construct ................................................................... 29
Table 3.4 Reliability of Organizational Resources Construct ............................................ 29
Table 3.5 Reliability of Organizational Capacity Construct .............................................. 29
Table 4.1: Descriptive Statistics for Innovation ................................................................ 37
Table 4.2: Correlational Analysis between Innovation and Competitive Advantage ......... 39
Table 4.3: Model Summary .............................................................................................. 40
Table 4.4: ANOVA for Innovation ................................................................................... 40
Table 4.5: Regression Coefficient for Innovation ............................................................. 41
Table 4.6: Descriptive Analysis for Organizational Resources and Competitive Advantage
........................................................................................................................................ 42
Table 4.7: Correlational Analysis between Organizational Resources and Competitive
Advantage........................................................................................................................ 44
Table 4.8: Model Summary for Organizational Resources ................................................ 45
Table 4.9: ANOVA for Organizational Resources ............................................................ 46
Table 4.10: Regression Coefficient for Organizational Resources and Competitive
Advantage........................................................................................................................ 46
Table 4.11: Descriptive Analysis for Organizational Capabilities and Competitive
Advantage........................................................................................................................ 48
Table 4.12: Correlational Analysis between Organizational Capabilities and Competitive
Advantage........................................................................................................................ 50
Table 4.13: Model Summary for Organizational Capabilities and Competitive Advantage
........................................................................................................................................ 51
Table 4.14: ANOVA for Organizational Capability and Competitive Advantage.............. 51
Table 4.15: Regression for Organizational Capability and Competitive Advantage .......... 52
xii
LIST OF FIGURES
Fig 2.1:Relationship between strategic factors and competitive advantage ....................... 22
Figure 4.1 Response Rate ................................................................................................. 33
Figure 4.2: Representation by Gender ............................................................................. 34
Figure 4.3: Representation by Age ................................................................................... 34
Figure 4.4: Numbers of Years Working at Safaricom Plc. ................................................ 35
Figure 4.5: Representation by Organizational Position ..................................................... 36
xiii
LIST OF ABBREVIATIONS
RBV Resource Based View
SPSS Statistical Package Software for Social Sciences
1
CHAPTER ONE
1.0 INTRODUCTION
1.1 Background of the Study
Globalization has increased the intensity of competition faced by organizations from the
international markets as well as the local markets. Companies are continuously searching
for ways to survive in turbulent times and are looking for that one thing that will set them
apart from their competitors (Cao, Huo, Li & Zhao, 2015). Huang, Dyerson, Wu, and
Harindranath, (2015), note that environments that used to be stable in the past are now
uncertain due to fast-tracking in technological change, a convergence of industries,
aggressive competitive behaviour and deregulation. As such the ability to gain a
competitive advantage has now been thought of as a survival tactic for many firms
(Atuahene-Gima, 2005). Porter (1985) describes competitive advantage as something
that an organization can create for its customers, that exceeds the cost of creating it and
further adds that it usually grows out of value. Christensen (2010) defines competitive
advantage as “whatever value a business provides that motivates its customers (or end-
users) to purchase its products or services rather than those of its competitors and that
poses impediments to imitation by actual or potential direct competitors."(p.21.)
Organizations, therefore, want to understand what is a competitive advantage and how
can an organization better position themselves in a competitive environment, to be able
to survive locally and globally.
Researchers, economists, and management strategist have given different views on how
an organization can achieve a competitive advantage (Huang et al., 2015). They include
factors that are both internal and external to the organization (Barney, 2014). In the
external view, a company can achieve an advantage through changes in its environments
political, economic, social and technological (PEST) factors. They could also achieve an
advantage through a stronger market position which helps them enjoy economies of
scale. Christensen (2001) found that companies in the 1960s and 70's used economies of
scale and PEST factors to attain an advantage.
Organizations can also achieve competitive advantage through factors internal to the
organization (Porter, 1985). A firm that is able to identify its position in the market is
able to better plan on ways of achieving its competitive advantage. A competitive
2
advantage is achieved when a company identifies and fits its activities in a way, that they
complement each other so as to create a differentiation in the consumers mind and add
on to their competitive advantage in their selected area (Oloko, Anene, Kiara, Kathambi,
& Mutulu, 2014). Brem, Maier, and Wimschneider (2016) found that companies need
to actively develop a competitive advantage, as it does not occur automatically to an
organization.
Porter, (1985) outlines three ways in which an organization can achieve a sustainable
advantage over its competitors through cost leadership, differentiation and focus. Firms
who desire to have a competitive advantage have to be able to identify strategic factors
within the organization that allow them to produce goods or services that are better than
the competition. Research has identified different strategic factors that contribute to firms
achieving competitive advantage. One of these strategic factors has been innovation.
Kanagal (2015) identifies innovation as one of the key strategies used to win over
customers and new markets, as it leads to a process of change in businesses and their
market offerings while leading to a competitive advantage for the organization. In the
United Kingdom Whalen and Han (2018) found that innovation has a positive
relationship with competitive advantage of an organizations as it helps organizations to
create a competitive advantage by creating value for both the organization and customer.
In Greece a study by Chatzoglou and Chatzoudes (2018) on the role of innovation in the
building of competitive advantage provides further evidence of a relationshop between
innovation and the competitive advantage of an organization.
In Brazil Castro and Giraldi (2018), found that there is a positive relationship between
innovation and competitive advantage. They established that Brazilian wine companies
were able to differentiate their products in a highly competitive market through the use
of an innovative brand name and a distinctive product their wine, which helped
consumers identify their wines in the market with ease. It must be noted that although
innovation is critical for most businesses it is sometimes very expensive and returns on
investments are sometimes disatisfactory (Andrew, Manget, Micheal, Taylor, & Zablit,
2010)
Studies have also reveald that organizations are now using resources and capabilities
available to them, to create and enhance their competitive advantage. This can be through
their unique resources and capabilities, whose characteristics include value, rareness,
3
imitability, and non-substitutability (Huang, Dyerson, Wu & Harindranath, 2015; Shan,
Luo, Zhou, & Wei, 2019). This is best explained by the resource-based view which
advocates that an organization can use its resources and capabilities to view, define and
cement its competitive position in the market place (Barney, 2014).
The resource based theory suggest in principle that organizations with valuable, scarce
and non-substitutable resources can gain competitive advantage temporarily by using
those resources to grow and implement product and market strategies Hsu and Ziedonis
(2013). Barney, (1991) further suggests that an organization that is in possession of these
resources and capabilities will be in a better competitive position and will have a better
performance. Sachitra and Chong (2018) found that in small holder farms in Sri Lanka
the resources and dynamic capabilities of these farms could explain the competitive
advantage of their products in the export markets. The study established that the small
holder farms were able to derive an advantage by making things better and cheaper than
their competitors.
Odero (2017) found that organizational resources do indeed have a positive effect on the
competitive advantage of an organization. In East Africa a study carried out by (Gillwald
& Mureithi, 2011) found that the use of licensing increased the competitive advantage
of Celtel in the East African Region as it allowed for integration of networks to allow for
cross border operation. As markets get more competitive and needed finances become
harder to come by, organizations are now finding that they have to look inward to see
what they can use to improve their competitiveness.
Organizations through continuous research have been able to come up with novel ways
to increase their competitiveness in their markets. One thing that ties all these efforts is
the (Porter, 1985) two-way approach to competitive advantage, where a company could
achieve competitive advantage either through product, price or differentiation. Porter
outlines that a company can use either cost leadership, differentiation or focus so as to
achieve a competitive advantage over other organizations. He argues that despite the
strategic factor employed by different firms. A company will want to differentiate
themselves from the competitors in those three ways.
Caterpillar Inc. were able to provide better products and services that their customers
could use and easily access in comparison to their competitors. Through their internal
resources and capabilities they were able to differentiate themselves in the market
4
worldwide through product durability, service, spare parts availability and an excellent
worldwide dealer network (Hout, Porter, & Rudden, 1982; Porter, 1985). Whalen and
Han (2018) found that two eateries located in London and San Francisco through a mix
of differentiation and pricing were able to achieve a competitive edge in their respective
markets. They were able in comparison to their competitors able to provide products and
services to their customers in a way that was not common in that era. Propelling them to
successful organizations in their respective markets.
Success with which a company is able to outperform its competitors is dependent on the
extent to which the firm is able to create a long-term defensible position in the industry
and this the organization can achieve, by being able to identify what are their key
strategic factors, then understanding what role do they play in helping the organization
achieve competitive advantage either through price, differentiation or product (Porter,
2008).
The Kenya telecommunications industry has been identified as one of the key sectors
providing growth for the Kenyan economy. The sector acts as a significant source of
economic development and job creation in various sectors of the economy. In the year
2019 the sector experienced rapid growth cementing its importance to the Kenyan
economy as a result of growth in the digital economy, mobile telephony and internet
penetration within the country. Kenya is also noted as having one of the world’s highest
mobile money penetration rate standing at fifty eight percent (Bryden, 2019; Frost &
Sullivan, 2018).
The Kenyan telecommunications industry is composed of six active competitors who
include Safaricom, Airtel, Telekom, Equity/ Finserve Africa Ltd, Sema Mobile Services,
Mobile Pay Ltd. Safaricom was incorporated in 1997 as a private limited company and
was eventually converted to a public limited company in the year 2002, (Executive
Research Associates, 2009). Safaricom is the largest telecommunications companies in
Kenya as seen from the regulator’s reports.
Whalen and Han (2018) found that two eateries located in London and San Francisco
through a mix of differentiation and pricing were able to achieve a competitive edge in
their respective markets. Success with which a company is able to outperform its
competitors is dependent on the extent to which the firm is able to create a long-term
defensible position in the industry and this the organization can achieve, by being able
5
to identify what are their key strategic factors, then understanding what role do they play
in helping the organization achieve competitive advantage either through price,
differentiation or product.
The Kenya telecommunications industry has been identified as one of the key sectors
providing growth for the Kenyan economy. The sector acts as a significant source of
economic development and job creation in various sectors of the economy. In the year
2019 the sector experienced rapid growth cementing its importance to the Kenyan
economy as a result of growth in the digital economy, mobile telephony and internet
penetration within the country (Bryden, 2019).
Kenya is also noted as having one of the world’s highest mobile money penetration rate
standing at fifty eight percent (Bryden, 2019; Frost & Sullivan, 2018). The Kenyan
telecommunications industry is composed of six active competitors who include
Safaricom, Airtel, Telekom, Equity/ Finserve Africa Ltd, Sema Mobile Services, Mobile
Pay Ltd. Safaricom was incorporated in 1997 as a private limited company and was
eventually converted to a public limited company in the year 2002 (Executive Research
Associates, 2009). Safaricom is the largest telecommunications companies in Kenya
amassing over 50% of the Kenyan market as seen from the regulator’s reports
(Communications Authority of Kenya, 2018).
Management needs to understand the strategic factors and combinations which work best
for their organizations in their search to achieve an advantage in their industries. There
is also a need to understand how an advantage is achieved (Contractor, 2013). It is with
interest to find out what has helped Safaricom achieve its competitive advantage in an
emerging market and if there are any links between the strategic factors it employs and
its competitive advantage.
1.2 Statement of the Problem
In the existing competitive business environment, companies in emerging markets are
looking for sources of advantage that can position the organization above the
competition, and improve the productivity and grow their bottom lines (Anning-Dorson,
2018) Competitive advantage is as a result of a combination of factors in an organization
and cannot be attributed to one existing factor. Safaricom plc has continuously invested
in innovation, organizational resources and capabilities as seen in their annual reports in
the last 5 years (Oloo, 2018; Safarcom, 2019; Safaricom, 2018). The telecommunications
6
industry has witnessed stiff competition amongst the industry players, as they scramble
for a market share.
The major players have had to adjust their product offerings and marketing so as to match
their competitors. The government has also come up with new rules and regulations
which were opposed in the industry. In the last three years Safaricom has seen a reduction
in their market share in the industry despite their investments in selected strategic areas
(Communications Authority of Kenya, 2018).
Studies have been carried out on illustrating different views of competitive advantage
around the world. Gautam and Bhandari Ghimire,(2017) found that employees who are
empowered psychologically increased the competitive advantage of a firm. In Kenya,
Ahmed (2019) carried out a study on the effects of generic strategies on competitive
advantage in the telecommunication industry. While Ezenewa, (2016) carried out a study
on social corporate responsibility as a tool for achieving and maintain a competitive
advantage. Arunda (2015) studied the influence of innovation of the MPESA product on
the competitive advantage at Safaricom. None of these studies has looked at the
relationship between strategic factors and the competitive advantage at Safaricom and
this study will fill this gap.
1.3 General Objective
The general objective of this study was to establish whether a relationship exists between
selected strategic factors and competitive advantage at Safaricom PLC.
1.4 Specific Objectives
The specific objectives of the study were as follows:
1.4.1 To establish a relationship between innovation and competitive advantage.
1.4.2 To establish a relationship between organizational resources and competitive
advantage.
1.4.3 To establish a relationship between organizational capabilities and competitive
advantage.
1.5 Justification of the Study
The findings of this study may be beneficial to the following stakeholders.
7
1.5.1 Safaricom
This study may help Safaricom management with knowledge on areas that provide a
competitive advantage to the organization and will help to plan on resource deployment
to strengthen these areas for future sustained competitive advantage. This information
will also be relevant to Safaricom staffs who work in these areas as they will be able to
better understand their organization and put in more effort in the identified areas.
1.5.2 Telecommunication Corporate Managers
The findings of the study are helpful to corporate managers of telecommunication
companies in terms providing an in-depth knowledge on how they could leverage on the
strategic factors at their disposal to increase their competitive advantage.
1.5.3 Researchers and Academicians
This study is an addition to the existing body of knowledge on competitive advantage for
academicians and will further provide a background for future research in the area of
sustainable competitive advantage for researchers interested in this topic
1.6 Scope of the Study
The study was limited in scope by focusing on members of staff of Safaricom plc. The
study included a sampling size of 800 Safaricom employees based in the enterprise
division of the organization. The study was conducted between April and July 2020. The
respondents of the study included managerial and non-managerial staff. The study faced
limitations in terms of data collection occasioned by the COVID-19 pandemic that made
it increasingly difficult to distribute the questionnaire. This limitation was overcome by
giving the respondents the option of responding to the questionnaire via the mail.
1.7 Definition of Terms
1.7.1 Innovation
Distanont and Khongmalai (2018) define innovation as a process of translating ideas or
inventions into a marketable good or service in a way that produces value.
1.7.2. Innovation Factors
8
Innovation factors can be defined as those areas or activities that can contribute or
influence a desired result in the innovation (Noorani, 2014).
1.7.2 Organizational Resources
Ahuja and Katila, (2014) define organizational resources as an asset or input to
production both tangible and intangible that an organization owns, controls or has access
to on a semi- permanent basis.
1.7.3. Organizational Capabilities
Kelchner (2020) defines an organizational capability as an organizations ability to
manage its resources effectively so as to gain an added advantage over their competitors.
1.7.4 Resource-Based View
(Barney, 1991) defines the resource-based view as a model that sees resources as key to
superior firm performance and if a resource is valuable, rare, costly to imitate and
organized to capture value, the resource enables the firm to gain and sustain competitive
advantage.
1.7.8 Strategic factors
Strategic factors can be defined as those areas that a company needs to get right to enjoy
success with its key stakeholders (Noorani, 2014).
1.8 Chapter Summary
Chapter one has outlined the concept of competitive advantage it has provided the
problem statement and has also looked at the purpose of the study which is to determine
if there is a relationship between customer value and the attainment of competitive
advantage. The chapter also addresses the scope of the study and definition of the key
terms. In Chapter two a review of the literature of previous studies will be carried out,
Chapter three will outline the research methodology in the research study. Chapter four
will present and explain the data collected, while chapter five will cover the study
discussion, conclusion and recommendations.
9
CHAPTER TWO
2.0 LITERATURE REVIEW
2.1 Introduction
The main aim of this study is to examine the relationship between selected strategic
factors and competitive advantage in organizations and more specifically in Safaricom
plc. In this chapter, we examine the literature regarding the creation of competitive
advantage in firms based on factors including innovation, organizational resources, and
organizational capabilities.
2.2 Relationship between Innovation and Competitive Advantage
2.2.1 Product Innovation
Various studies have examined the relationship between product innovation and the
creation of competitive advantage in firms. Reguia (2014) examined how product
innovation influenced competitive advantage. Reguia defined product innovation as the
development of new products or modifying the existing products or the use of new
technologies or techniques to come up with differentiating features that are better than
those of the existing ones. Product innovation is therefore internal, where it relies on
capacities, knowledge, resources of the company or it may be external where it focusses
on the needs of the consumers and expectations of the stakeholders.
Reguia concluded that companies are only able to retain their market share and enhance
their competitiveness by adopting product innovation approaches such as research and
development; motivating product innovators; promoting efficient innovation policies and
programs and allocating financial resources for supporting new innovation. This is
essential because product innovation significantly contributes to the improvement of
product quality, thereby making products more competitive in the target markets.
Auma (2014) examined the role of innovation in developing a competitive advantage in
the horticultural process and export firms in Kenya. Auma established that product
innovation plays a critical role to strengthen the competitiveness of firms in their
respective industries as compared to their rivals through enhanced growth margins,
profitability and also maintaining the market share. The study concluded that a firm’s
10
competitive advantage is dependent on its capacity to benefit from its product innovation
initiatives. This is because the development of new products makes it easier for
consumers to use them, thereby boosting their satisfaction. Product innovation may also
improve product quality and functionality, thereby addressing consumer needs.
Noorani (2014) examined the interrelation between service innovation and competitive
advantage. Noorani notes that companies are exploring tools, methods, and services that
will help them to develop their competitive edge. They have, therefore, introduced more
innovative services in order to edge out their competitors in the marketplace. The study
established service innovation has leveraged on technological development to realize the
fastest and finest system that adequately addresses the needs of the market and therefore
facilitates the competitiveness of firms in specific industries.
Gachigo, Kahuthia and Muraguri (2019) explored the relationship between innovative
strategy and the performance of telecommunication companies in Kenya, focusing on
Safaricom Plc. The study established that firms that value product innovation desist from
penalizing employees for coming up with ideas that do not work; instead, encourage
them to continue engaging in innovative activities, which has seen to the creation of new
markets, increase in the market share. Constant modification of products through
experimenting on creative ideas improved on their quality and resulted in their wider
reception in the marketplace. The study, therefore, concluded that explorative innovation
strategies led to increased performance of the telecommunication industry, benefiting
more the firms that were leading in product innovation.
2.2.2 Process Innovation
Process innovation is a construct of innovation that is adopted within organizations to
enhance processes and procedures in the firm. Auma, (2014) established that process
innovation resulted in competitive advantage as it helped firms to reduce the unit costs
of delivery or production, even as it increased the quality of product or service that is
produced. This resulted in serving markets with low-cost quality products that invariably
gave the firm some competitive edge against their rivals.
Studies have explored the relationship between a process innovation and the creation of
competitive advantage in forms. Ogbo, Okechukwu and Ukpere (2012) looked at the
11
management of innovations in the telecommunication industry in Nigeria. The study
established that businesses compete successfully whenever they provide new, cheaper
and better products and services that their customers can use, yet their competitors cannot
provide. Therefore, a competitive advantage is derived from the capacity of a business
firm to do or make things that are better or cheaper. This involves a relative dimension
where the competitive advantage is found in the firm’s processes as compared to those
of the competitors. There is also an absolute dimension in which case there is a market
that is targeted by the firm’s processes. Innovative processes result in value-added
products and services for the market, hence establishing a competitive advantage.
Ogbo et al.(2012) studied the relationship between innovation and business performance
in the telecommunication industry in the Sub-Saharan region, focusing on Somalia. They
regarded process innovation in the same light with technical innovation, which they
claimed entailed developing news procedures, ways, strategies and guidelines that help
the firm to achieve its objectives. It, therefore, changes the processes and procedures that
generate new products and services that are offered to the often volatile or competitive
markets. Fundamentally, process innovation becomes a critical determinant of the firm’s
competitive advantage. The study concluded that some of the indicators of competitive
advantage triggered by process or technical innovation include enhancing customer
satisfaction, increased market share, increased return in sales, and increased
profitability.
Mathenge (2013) investigated the effects of financial innovation on the competitive
advantage of companies in the telecommunication industry in Kenya. Mathenge refers to
financial innovation as the development of new financial products and services or rather
the development of new processes for financial services that significantly reduce risks
and costs and provide enhanced services that meet the needs of the participants in the
financial system. The study established that financial innovation spurred growth in
telecommunication companies by giving them a competitive advantage.
The innovations positively affected the telecom companies' performance that they
focused their resources on developing financial services, which gave them a competitive
edge in the industry. Even though the telecom companies had various aims of financial
innovation in the quest to achieve a competitive advantage, their major objective was to
12
achieve process evaluation. The study identified the dimensions of financial innovation
as including service, product and process innovation, with product innovating rating as
having the most significant and positive impact on the performance of firms, hence their
competitiveness.
Veerendrakumar and Shivashankar (2015) conducted an exploratory study in North-
Karnataka, looking into the influence of supply chain innovations on sustainable
competitive advantage, required to strengthen the performance of organizations. The
study established that the supply chain could boost formal cooperation and inject impetus
in business by improving the competitive advantage through continuous innovation. Due
to these, companies that deal in the supply chain are focused on new and dynamic
markets characterized by dynamic and emerging rules that require a strategic emphasis
on innovativeness within companies and across the supply chain to sustain success.
2.2.3 Market Innovation
Market innovation is another key dimension of innovation that is related to the creation
of competitive advantage in firms. Auma (2014) defines market innovation as involving
the implementation of new marketing approaches that significantly change the design or
packaging of the product, and also the product’s promotion, placement, and pricing.
Marketing innovation targets addressing the needs of the consumers, penetrating new
markets and/or repositioning a product in the market with the aim of increasing its sales.
Therefore, marketing innovation is closely related to the four marketing Ps.
Studies that have examined the relationship between market innovation and competitive
advantage of firms have concurred that the indicator is critical in enabling firms to either
retain their market share or penetrate new markets and new market positions. Ungerman,
Dedkova and Gurinova (2018) looked at the effects of market innovation on the
competitiveness of businesses in the industry 4.0 context. The regarded marketing
innovation as they search for new or creative solutions to marketing needs and problems.
The study noted that marketing innovation needs to be a component of marketing concept
and strategy; it is based on the understanding that by adhering to the existing marketing
rules is not enough to enable forms to succeed and be competitive in crowded markets.
Marketing innovation is based on lateral thinking, which included principles such as
provocativeness, boundlessness, and playfulness.
13
Some of the key areas of marketing innovation that require progressive development are
ambient marketing, ambush marketing, guerrilla marketing, personal marketing,
environmental marketing, mobile marketing, viral marketing, buzz marketing, and event
marketing. The other areas of innovation marketing include geo-marketing, e-word of
mouth marketing, neuromarketing and behavioral marketing. The study found that
marketing innovation help firms build their public relations and therefore increase the
value of their business. Besides, through marketing innovation firms are able to improve
the communication with their customers; thereby understand them better to an extent that
they satisfy their needs as expected. Through marketing innovation and particularly the
adoption of Industry 4.0, firms are better equipped to penetrate industries as compared
to their competitors.
Joueid and Coenders (2018) studied marketing innovation in new product portfolios.
They defined marketing innovation as the implementation of new marketing strategies,
which involve significant changes to a business’ marketing mix. The study found out that
marketing innovation is a crucial predictor of the performance of business enterprises.
The study established that innovative product design, pricing, packaging, promotion, and
placement strategies are promising sources of product performance. This indicates that
marketing innovation is, therefore, a crucial source of sustainable competitive advance
for firms. Therefore, firms that seek to enhance their marketing innovation need to invest
in innovation training, information and communication technologies, organizational
learning capabilities, external information absorption, and collaboration.
2.3 Relationship between Organizational Resources and Competitive Advantage
2.3.1 Intellectual Capital
Laban and Deya (2019) examined the relationship between the intellectual capital of
firms and the realization of competitive advantage. They noted that in the current
competitive global market the value creation factors for business companies are changing
fast. The competitive landscape is pushing companies to acquire intellectual assets and
seek to effectively use them to realize profitability. Firms are increasingly relying on the
management of intellectual knowledge to add value to their knowledge workers,
interactions and products. The study found that intellectual capital plays a significant role
in the creation of knowledge, which enhances the value of business firms. Intellectual
capital gives firms a sustainable competitive advantage particularly based on how it uses
14
that knowledge to improve its processes, enhance its products and services and address
the needs of the consumers. Intellectual capital becomes a significant differentiator in the
marketplace when the competitors are unable to imitate a firm’s competence and
capabilities.
Additionally, Odongo (2015) examined how intellectual property rights are used as a
strategic tool for attaining a competitive advantage at Safaricom Kenya Limited. The
study defined intellectual property rights as the protection of human creativity that has
resulted in the generation of new products or services. They are, therefore, legal devices,
which protect the products of human creativity that have commercial value by granting
exclusive rights to their creators; they protect the use of or access to the intellectual
property from the use of third parties.
The study noted that aggressive and comprehensive intellectual property rights have been
adopted by telecom firms in the management of strategic joint development alliances and
returns on technology, with the objective of transferring information and specifications
from investors to partners through intellectual property and patent licensing. The study
established that Safaricom Limited had achieved market leadership by using intellectual
property rights, more particularly in patenting their innovative products. This has enabled
the company to achieve high profitability levels by providing unique financial and
communication products and services, which attract high numbers of customers and also
increase the number of subscribers.
2.3.2 Relationship between shared core values and competitive advantage
Organizational culture has been broadly considered as the way in which organizational
members get things done, which differ from one context to another. Studies that have
linked organizational culture to the creation of competitive advantage include
Bogdanowicz (2014) who looked at how organizational culture is used to achieve a
competitive advantage in telecommunication companies in Poland. The study notes the
significance of identifying the source of competitive advantage for firms especially with
the intensification of competitive pressure, which makes it hard for businesses to achieve
market leadership or to stay on the top of the market. The study found that organizational
culture provides the foundation for building a firm’s identity, desired organizational
behavior and external image. A firm’s culture could become the source of its competitive
15
advantage if it fosters innovation, and rewards flexibility, collaboration, creativity, and
risk-taking.
Ahmed and Shafiq (2014) studied the impact of organizational culture on the
performance of companies in the telecommunication sector. The study defines
organizational culture as the collective programming of the minds of members of an
organization, which differentiates them from members of other organizations. It,
therefore, includes a combination of beliefs, values, communications, and behaviors that
provide direction to the organizational people. The findings of the study showed that
organizational culture helps to avoid higher uncertainty, which leads to improved
productivity, hence creating competitiveness. The findings also showed that
organizations whose cultures acknowledge and reward performance and creativity end
up promoting innovativeness, which in turn leads to the creation of unique, competitive
products and services.
In another study, Mwendwa (2017) examined the effects of a multidimensional culture
on the performance of mobile telecommunication companies in Kenya. The study
defined organizational culture as including all commonly shared mental assumptions,
which guide interpretation of issues in an organizational context and also leads to acts
through defining the expected appropriate behavior in particular situations. The study
found out that multidimensional culture significantly increased the delivery of services
in the telecom companies. In particular, multidimensional culture improved the
teamwork level amongst the employees, resulting in synergy and creativity. This resulted
in the development of improved or new products and services that did not just lead to
market penetration but also increased customer satisfaction levels.
2.3.3 Brand Equity
Various studies have explored the relationship between brand equity and the attainment
of competitive advantage in business. Laura, Amoro, Wang and Gondje-Dacka, (2016)
examined how the brand equity of MTN Telecom Cameroon is critical in the
competitiveness of the company in its market. The study interrogated brand equity
through other brand dimensions such as brand trust, perceived brand trust, brand quality,
and brand loyalty in the service industry and more particularly the telecommunication
industry. They noted that companies develop brand equity for their products by making
16
them easily recognizable, memorable, reliable, and of superior quality. The established
brand equity of the company consisted of the value that the brand provided to the
products and services that was provided to the target customers. It included all the assets
and liabilities that were related to the brand, the symbols, logo, and packaging of
products.
Laura et al. (2016) further noted that these played a significant role in promoting either
a positive or negative value to the company’s products and services. The study also found
that the value of the company’s products and services largely relied on the thoughts,
feelings, and actions of their customers regarding the brand. It also relied on the brands’
pricing, the company’s market share, and profitability. The study concluded that
companies succeed to develop positive brand equity by reinforcing their brand image and
securing the market for their products and services. The study also concluded that factors
such as customer loyalty, brand awareness, and perceived value are some of the key
indicators of strong brand equity.
Therefore, companies that seek to be competitive in the marketplace need to ensure that
they develop their brand equity to enable their customers to differentiate them from
others. Brand equity also enhances competitiveness by entrenching customer loyalty, and
therefore, securing a company’s market share. Amegbe, Hanu, and Atunwey (2016)
study how the competitive performance of the private universities in Ghana is influenced
by customer-based brand equity. They defined consumer-based brand equity as the
differential effect of the brand knowledge on the response of the customers to the
promotion of the brand.
Consumer-based brand equity is realized when customers have a high level of awareness
with the brand, and also have some unique and favorable associations with the brand.
They argue that since brands represent the feelings and perceptions of the consumers
regarding a product or service, the value of strong brands consists in their ability to
address customer preference and capture their loyalty. The study established that the
competitiveness of the private universities was based on the development of strong brand
equity, which translated into brand association and brand awareness amongst the
students.
17
Besides, Buzdar, Janjua, and Khurshid (2016) examined the relationship between
customer-based brand equity and the performance of firms in the telecommunication
industry. They noted that brands are the second most important asset for businesses after
the customers. They also defined customer-based brand equity as the overall strength of
a particular brand in the customers’ eyes.
With high brand equity companies are able to charge more than their rivals; they also
enjoy a competitive advantage in the sense that they have the opportunity for exhibiting
resilience and extension against the promotional pressure of their rivals. Besides, with
robust brand equality, telecom firms are able to create significant barriers for new
entrants. Due to this, telecom companies are focusing on developing a sound perception
about the quality of their services through advertising and promotion; they are also
investing in providing their customers with superior services.
Chepkwony, Langat, Rop and Naibei, (2018) looked at the influence of brand equity on
the performance of the mobile telecom companies in Kenya. They considered brand
equity as a set of brand assets and liabilities that are associated with a particular brand,
its symbol, and name, which influences the value of the product or service of a company.
The study established that strong brand equity is essential for enhancing the value of the
proprietary firm and also facilitates positive effective in the manner customers end up
perceiving a brand, thereby, eliciting favorable consumer behavior.
Mobile telecom company seeks to develop robust brand equity through investing in
modern telecommunication infrastructure, product development, brand extensions,
rebranding, establishing customer service centers, strengthening dealership networks,
regular tariff reviews and also through advertising and promotional activities. Through
these brands, equity approaches the telecom firm to seek to edge out their rivals in their
highly competitive industry.
2.4 Relationship between Organizational Capabilities and Competitive Advantage
2.4.1 Customer Service
Customer service is a crucial indicator of organizational capabilities, which directly
connects the firm to its customers. Studies relating customer service to competitive
advantage include Wouters (2001) who examined customer service as an instrument for
18
achieving competitive advantage in supply chains. The study defines customer service
as the interface between marketing and logistics in the supply chain context. Customer
service is, therefore, a vital concept with the potential for bridging the gap between the
ever-increasing customer demand for flexibility and the need for reducing production
and reduction costs. In turn, the bridging of this gap results in a sustainable competitive
advantage. Effective customer service leads to enhanced service performance and the
desired market response; it also reflects in terms of customer satisfaction, positive
customer attitude, increased repurchase intention, increased market share and also
increased turnover.
Additionally, Srivastava and Bhatnagar (2012) examined the use of customer care
services as a tool for attaining customer satisfaction and competitive advantage in mobile
telecom services in India. They noted that even though customer services vary based on
the industry, customers, and products, it is a central component of a customer-centric
paradigm shift that is essential for achieving quality improvement in business. In
particular, all types of service providers are investing huge amounts of resources to
enhance their customer experience.
Srivastava and Bhatnagar established that mobile telecom service providers invest in
taking care of their subscribers by understanding their respective needs and wants,
addressing their grievances and problems promptly and providing them with good quality
service; this, in turn, translates into customer loyalty, which makes the service providers
edge out their competitors.
In another study, Mäntymaa, (2013) explored how competitive advantage is gained in
the financial industry through quality customer service. The study notes that competition
in the business world is currently both dynamic and challenging. In turn, customers have
become more aware of this competitive business world and besides, the information age
has made it easier for them to look for information about products and services. These
factors have significantly change the market forces in various industries, with customers
attaining a dominant position in terms of their bargaining power. This increased
bargaining power has made customers very demanding towards the service providers.
Mäntymaa found out that competitive advantage amongst the insurance and bank
companies relied on customer loyalty, which was gained by adding more value in the
19
relationship with their customers. The study also found that having satisfied customers
was not enough to assure the companies of the loyal market base; only very satisfied
customers counted as the competitive edge, as they could even recruit more by
recommending them to use the products and services that the companies provided.
Through quality customer services, the companies were able to personal preferences of
their customers, which enhanced their experience and thereby, built on the companies’
competitive advantage.
Beside, Yeboah & Ewur, (2014) looked at how quality customer service is used as a
competitive advantage in the telecom industry in Ghana. They defined customer service
as anything that a business does for their customer to enhance their experience. In turn,
quality service is the measure of the level to which the expectations of the customer’s
match with the experience of the delivered service. This awareness translates into an
emotional reaction that reflects either the satisfaction or dissatisfaction of the product or
service that the customer has purchased. The study found that quality customer service
was critical to telecom companies in their quest to achieve and maintain sustainable
competitive advantage because they are able to establish customer confidence and trust.
2.4.2 Knowledge Management
Various studies have also linked competitive advantage with sound knowledge
management in organizations. For instance, Rahimli, (2012) investigated the association
between organizational knowledge management and its competitive advantage. The
study notes that the creation of a sustainable competitive advantage requires the creation,
distribution, and use of knowledge throughout the organization and effective application
in the organizational processes. This makes it imperative for organizations to determine
the kind of knowledge that they should seek to improve their organizational activities
and therefore, attain sustainable competitive advantage.
The study concluded that knowledge is a fundamental principle for achieving
competitive advantage for businesses, particular in regards to proper management of
organizational resources. The importance of knowledge management is especially
critical when the production and processes of the firm rely on human capital and
intellectual capital for productivity.
20
In another study, Nasimi et al., (2013)) also studied the relationship between knowledge
management and competitive advantage in firms. They noted that knowledge is an
important source of organizational learning, problem-solving, establishment of new
market positions and the creation of core competitiveness. The study found that
knowledge management is critical in helping the organization in the identification,
selection, organization, and sharing of information and skills that the organization
requires to solve its problems, make strategic plans and undertake dynamic decision-
making processes.
Meihami and Meihami (2014) examined knowledge management as an approach to
establishing a competitive advantage in firms. They note that knowledge is the basis of
competition in the current business world as it drives creativity and innovation of new
processes and products. The study found that knowledge management enabled a
systematic organization, which results in better resource utilization. Knowledge
management leads to innovation and productivity, which through the creation of unique
products and services, makes firms competitive in their respective industries.
Additionally, Muthee, (2014) examined the use of knowledge management as a strategic
tool to achieve a competitive advantage in the telecommunication industry in Kenya. The
study defined knowledge management as consisting of a mix of organizational strategic
goals, culture, employees' needs and expertise in the realization of a learning and growth
atmosphere. The study established that knowledge management helped firms to reduce
external and internal environmental uncertainties.
The horizontal and vertical management of knowledge resulted in flexibility and
coordination of activities, which is a prerequisite for meeting internal and external
growth. Knowledge management also results in the improvement of employee
knowledge and skills that help in the development of innovative products and delivery
of quality services. The combination of all these benefits of knowledge management
leads to a competitive advantage for firms in the telecom industry in Kenya.
2.4.3 Distribution Networks
The distribution network can be considered as the nervous system that connects the
business to its distinct components. Various studies have examined the relationship
21
between distribution networks and firms a competitive advantage. For one, Ndung’u,
(2012) explored the use of distribution strategies to achieve competitive advantage
amongst the commercial banks in Kenya. The study notes that one of the sources of
firms’ competitive advantage is the distribution strategies that they adopt to sell their
products.
With a successful selection of a distribution strategy, the implementation, and
management of a distribution channel a firm is able to meet the needs of its customers
and learn the consumer behaviors of their target markets. The study found out that the
competitive advantage of the firm is no longer solely reliant on the product and services
that it offers but also on its organizational capabilities that make those products and
services easily available in the marketplace. The study also established that effective
distribution strategies yield a robust distribution network, which enables firms to
outperform their competitors in terms of sales.
Sukati, Hamid, Baharun, Alifiah and Anuar, (2012) examined how competitive
advantage can be achieved through developing supply chain integration and supply chain
responsiveness. The study defined supply chain integration as the level to which all the
activities within the firm, its suppliers and customers are integrated. For firms to achieve
a competitive advantage, they need to have a better response to their customer needs as
compared to their competitors, which in turn builds up to their competitive advantage.
The study found that greater responsiveness was required for organizations in today’s
competitive business landscape, in order for firms to meet the needs of their customers
in a timely way.
Maqbool, Rafiq, Imran, Qadeer and Abbas, (2014) examined the creation of competitive
advantage through the management of the supply chain network. They noted that in the
current fast-growing and competitive markets, the needs of consumers vary widely and
firms are producing a variety of products and services in a bid to address these varied,
dynamic needs. This requires a strong distribution network characterized by sound
decision-making across the firm’s supply chain throughout the purchasing, production,
scheduling, distribution, and control of inventory.
22
The study established that for competitiveness to be achieved the distribution network
should factor in both inter and intra organizational coordination, supplier and customer
relationship management and, transportation and distribution. With proper distribution,
channel firms are able to make effective forecasts, plan production, improve on their
inventory management and distribution, which are key in achieving a competitive edge
in competitive markets.
Mwanza and Ingari, (2015) examined the use of distribution by fast-moving consumer
goods sold as a strategic approach for attaining competitive advantage. The study focused
on direct distribution networks, which sell products directly to the consumers without
involving the intermediaries. They noted that the direct distribution channel may involve
mail orders or computer sales and face to face sales without involving any third-party
distributors. The study found that direct distribution channels enable businesses to
directly profit from their products without incurring overhead costs, which positively
affected their competitive edge against their rivals.
Conceptual Framework
Fig 2.1: Relationship between strategic factors and competitive advantage
2.5 Chapter Summary
This chapter examined previous studies that have explored relations between key
variables in this study both within and outside the telecommunication industry. The
Innovation
Product Innovation
Process Innovation
Market Innovation
Organizational Resources
Intellectual Property
Shared Values
Brand Equity
Organizational Capabilities
Customer Service
Knowledge Management
Distribution Networks
Competitive Advantage
Cost Leadership
Differentiation
Focused Market
Profitability
Market Share
Reputation
Dependent Variable
Independent Variables
23
review has related that innovation is a predictor of competitive advantage in firms in
terms of product innovation, process innovation, and marketing innovation. Product
innovation leads to the development of competitive products and services; process
innovation results in the enhanced production process and service delivery and market
innovation results in the development of new products and services that specifically
address the needs of the consumers.
The review also established that organizational resources are essential for the realization
of competitive advantage in competitive markets through resources such as intellectual
property, organizational culture, and brand equity. Intellectual property enables
organizations to possess unique protected assets that enhance production processes and
service delivery; organizational culture creates environments in which teamwork and
innovation generate new products and services, while brand equity attracts and retains
the targeted markets for the company.
Furthermore, the reviewed literature indicated that organizational capabilities such as
customer service, knowledge management, and distribution network are predictors of a
firm’s competitive advantage. Quality customer service provides the customer with an
experience that makes them attached to the product or service; knowledge management
ensures the attainment of creativity, innovation, and productivity through streamlined
operations, which translates to innovation and profitability. Distribution networks link
the firms to the consumers facilitating the acquisition of feedback that is used to make
better service delivery processes and new products and services.
24
CHAPTER THREE
3.0 RESEARCH METHODOLOGY
3.1 Introduction
This chapter outlines the methodology to be used in the study including the design, the
population of the study, sample size, sample frame, data collection methods, research
procedures and data analysis and presentation of the research findings
3.2 Research Design
According to Cooper and Schindler (2014) research design is the blue print or the plan
for collection, measurement and analysis of data. Rahi (2017) defined research design as
the overall strategy that a researcher chooses in order to integrate the different
components of the study in a coherent and logical way to ensure that the research problem
is effectively addressed . Akhtar (2016), adds that a research design is a blueprint and
general outline that describes how, when and where data are to be collected and how the
collected data will be analysed to come up with useful information.
The researcher adopted a correlational descriptive survey research design, which is a
method used for gathering information about people’s opinions Orodho (2009).
Correlational descriptive survey research design is used to analyze both qualitative and
quantitative data in order to compare and contrast and confirm existing relationships Best
and Kahn (2005). The design is useful in getting evidence about a present situation and
discovering standards to be used to collate current conditions Mugenda (2011).
3.3 Population and Sampling Design
3.3.1 Population
Mugenda and Mugenda (2007) define a population as an entire element that meets the
criteria for inclusion in a study. Cooper and Schindler, (2014) postulate that a population
is the total collection of elements about which we wish to make some inference. The
population of this study was drawn from Safaricom’s enterprise division. The employees
interviewed were drawn from various levels including top and middle level management,
together with permanent non-managerial staff. The total population of the Safaricom
enterprise division the researcher studied consisted of 800 employees.
25
Table 3.1 Population Distribution
Source: Safaricom plc (2019)
3.3.2 Sampling Design
3.3.2.1 Sampling Frame
Sampling frame denotes the list of the target population from which a sample will be
drawn Lavrakas (2018). A sampling frame can also be defined as a complete list of all
the items in the target population from which a sample is drawn (Saunder, Lewis, and
Thornhill, 2016). An accurate number and constitution of the employees in the enterprise
division of Safaricom was obtained from Safaricom’s human resource department. An
appropriate sample was obtained using primary data, the researcher attained the number
of staff within Safaricom’s enterprise division who were then be divided into top level
management, middle level management and permanent non-managerial staff. An
appropriate sample size was obtained which allowed for the generalization of the
findings.
3.3.2.2 Sampling Technique
Sampling technique is the process through which the entities in a sample are identified
and selected Organisation for Economic Co-operation and Development (2010).
Molenberghs (2013) defines sampling techniques as the process of selecting some
elements from a population to represent the entire population. A simple probability
sampling technique was used to ensure that each participant was given an equal chance
to participate in the study. All the individuals were placed in a strata that included senior
and middle level management, permanent non managerial staff. The employees selected
from each level were then requested to fill in the questionnaires.
3.3.2.3 Sample Size
Babbie (2010) suggests that a sample size refers to the actual respondents the researcher
aims to interview. Researchers have to ensure that a sample is reflective of the
Target Population Characteristics Frequency
Senior level management 28
Middle level management 70
Permanent non-managerial staff 702
Total 800
26
population, by ensuring that the characteristics of the population are clearly defined, that
the right sample size is determined and finally that the appropriate method is used for
selecting individuals in the population. A simplified formula provided by (Yamane,
1967) was be used to calculate the appropriate sample size, the formula assumes a 95%
confidence level and P = .5 . The formula is as follows
n =
𝑁
1+𝑁(e)²
Where;
n is the sample size, N is the population size, e is the alpha level
Using the formula, the sample size for this study was;
n =
800
= 267
1+ 800(0.05) ²
Using the above formula, the sample size for this study was 267 individuals.
Table 3.2 Distribution of Sample Size
Target Population Category Target Population Sample Size
Senior level management 28 10
Middle level management 70 24
Permanent non-managerial staff 702 233
Total 800 267
3.4 Data Collection Methods
Data collection instruments are those tools used by the researcher to collect data from
the respondents Mugenda and Mugenda (2007). The research instrument used was a
27
structured questionnaire developed by the researcher as this allowed for convenience of
data collection and kept the interviewee anonymous. A questionnaire was also used as
it was inexpensive in its administration and could be administered in various ways for
example electronically, personally or over the phone. The questionnaire was based on
specific objectives of the research to be conducted.
The questionnaire was structured according to the following research objectives. Does
innovation have a statistically significant relationship with competitive advantage at
Safaricom? Do organizational resources have a statistically significant relationship with
competitive advantage at Safaricom? Do organizational resources have a statistically
significant relationship with competitive advantage at Safaricom?
It contained closed ended questions and contained a Likert scale with five levels of
response (Strongly Agree, Agree, Neutral, Disagree, and Strongly Disagree). The
questionnaire was divided into five sections and consisted of closed ended questions.
Section one was based on the demographics of the respondents, section two was based
on the relationship of innovation and strategic factors, section three was based on the
relationship of organizational resources and strategic factors, section four was based on
the relationship between organizational capabilities and strategic factors and section five
looked at the measures of competitive advantage.
3.5 Research Procedures
Upon approval and clearance of the research proposal by the United States International
University-Africa. The researcher sought for approval from the National Commission for
Science, Technology and Innovation (NACOSTI) so as to be able to carry out the
research. A letter was then written to the organization so as to be able to carry out the
research on their employees.
A pilot test was then carried out on 15 random employees who were not included in the
study so that any arising issues were corrected before being handed out to the rest of the
respondents. The researcher ensured that ethical considerations were strictly adhered to.
As the respondents participated in this study, they were duly informed and their consent
approved, so as to ensure that the respondents participated voluntarily in the research and
they were made aware that they could withdraw from the study if they so wished to. Use
of offensive language was avoided in the questionnaire provided and the study-
28
maintained objectivity in discussions and analysis. Finally, privacy and anonymity were
provided to all the participants throughout the study.
Ethical considerations were strictly adhered to as the respondents participated in this
study after they had been informed and their consent approved, so as to ensure that the
respondents participated voluntarily in the research and they were made aware that they
could withdraw from the study if they so wished to. Use of offensive language was
avoided in the questionnaire provided and the study-maintained objectivity in
discussions and analysis. Finally, privacy and anonymity were provided to all the
participants throughout the study.
Questionnaires were then handed to randomly selected employees in each area of top and
middle level management and non-managerial permanent employees. The respondents
were given an ample amount of time so as to complete the questionnaire and guidance
was provided where needed. Once the questionnaires were answered, the researcher
collected the hard and soft copies from the organization and google forms.
The questionnaire was validated by expert judgment provided by the supervisor.
Cronbach’s alpha was used to calculate the internal consistency of the measurement tools
and a Cronbach alpha value of r = 0.7 was accepted as reliable. The Cronbach alpha was
used in this study to calculate the internal consistency of the measurement tools. The
reliability of measurement tools is considered as the capacity of the measurements to
yield similar results when used in similar circumstance.
The measurement tools in this case included variables such as Innovation, Organizational
Resources, Organizational Capability and Competitive Advantage. Kothari (2014)
considers the Cronbach’s alpha as the measure of how well a particular set of items of
variables measure a unidimensional or single latent construct. The measure is essentially
the correlation between the item responses within the questionnaire in case where the
items measure a similar construct. The Cronbach’s alpha values are high whenever the
correlation between the respective questionnaires are high. According to Mugenda and
Mugenda (2003),
The reliability test of the innovation construct that was tested in the study yielded a
Cronbach’s alpha of 0.809 which indicates a strong internal consistency, therefore
verifying the reliability of the scale. The findings are shown in Table 4.1
29
Table 3.3 Reliability of Innovation Construct
Reliability Statistics
Cronbach's Alpha Cronbach's Alpha Based
on Standardized Items
N of Items
.809 .811
The reliability test of the Organizational Resource construct indicated that it attained a
Cronbach’s alpha of 0.742, which demonstrated that it had a strong internal consistency,
thereby verifying the reliability of the measurement scale. The findings are shown in
Table 3.4 Reliability of Organizational Resources Construct
Reliability Statistics
Cronbach's Alpha Cronbach's Alpha Based
on Standardized Items
N of Items
.742 .742 12
The findings showed that the reliability test of Organizational Capabilities yielded a
Cronbach’s alpha of 0.778, which indicated a strong internal consistency and thereby
verifying the reliability of the measurement scale. The findings are shown in Table 3.5
Table 3.5 Reliability of Organizational Capacity Construct
Reliability Statistics
Cronbach's Alpha Cronbach's Alpha Based
on Standardized Items
N of Items
.778 .781
To ensure a high response rate an online platform was provided for those who wished
to answer the questionnaire at their free time and incase of questions an email address
was provided.
30
3.6 Data Analysis Methods
Cooper and Schindler (2014) describe data analysis as a process of editing and reducing
data to a level that is manageable by the researcher so that summaries can be developed
and patterns found by using statistical techniques. The data obtained from the close ended
questionnaires was analyzed using quantitative data analysis applied in the Statistical
Package for Social Sciences (SPSS) version 23. The study aimed to establish a
relationship between the three explanatory variables and competitive advantage,
inferential statistics analysis was therefore applied.
Bivariate linear regression analysis was conducted to establish the relationship between
innovation and competitive advantage, organizational resources and competitive
advantage, organizational capabilities and competitive advantage. One-way analysis of
variance (ANOVA) was also used to determine the significance of the relationship
between Innovation, organizational resources and organizational capabilities on firm
competitive advantage of Safaricom. Regression analysis was be used to further assess
influence of independent variable.
The following model was formed from the statistical significance and magnitude of
association of the variables:
The bivariate regression model for Innovation was as follows:
Y = β0 + β1 +X1 + e
Where
Y = Competitive Advantage
X1 = Innovation
β0 = is the constant term or intercept
β1=measure the sensitivity of Y (i.e. the dependent variable) to the unit change in the
Innovation
e = the error that captures the unexplained variations in the model.
The bivariate regression model for Organizational Resources was as follows:
Y = β0 + β2X2+ e
31
Where
Y = Competitive Advantage
X2= Organizational Resources
β0= the constant term or intercept
β2= measure the sensitivity of Y (i.e. the dependent variable) to the unit change in the
Organizational Resources.
e = represents the error that captures the unexplained variations in the model.
The bivariate regression model for Organizational Capabilities was as follows:
Y = β0 + β3 + X3 + e
Where
Y = Competitive Advantage
X3 = Organizational Capabilities
β0 = the constant term or intercept
β3=measure the sensitivity of Y (i.e. the dependent variable) to the unit change in the
Organizational Capabilities.
e = represents the error that captures the unexplained variations in the model.
3.8 Chapter Summary
This chapter of the study covered the methodology that was adopted conducting the
research process. The section explained the research design and justified the choice of
the methods. The chapter also discussed population and sampling design which includes
the sampling frame, sampling technique and sample size along with how the sample is
calculated. The chapter defined and specified the data collection instrument, the research
procedures to be followed as well as the analytical techniques and tools to be used. The
next chapter presents the analysis of findings of the study.
32
CHAPTER FOUR
4.0 RESULTS AND FINDINGS
4.1 Introduction
This chapter presents the findings of this study based on the research objectives. The
chapter first presents the response rate of the questionnaire and the demographic results
of the research respondents. This is followed by the results on objectives to follow in
summary.
4.2 General Information
4.2.1 Response Rate
A total of 267 questionnaires were distributed to the employees at Safaricom Plc., who
hold various positions ranging from top-level management to the operational level
employees in the enterprise division. Out of the 267 that were given out, 71 were not
returned. However, seven out of the 196 that were returned were not included in the final
analysis as they had most questions unfilled. Therefore, with a total of 189 questionnaires
returned, the study’s response rate was 71 %. The results are presented in Figure 4.1.
According to (Babbie, 2010) the overall response rate is an indicator of the
representativeness of the sampled respondents. Therefore, high response rates indicate
that there is less chance of significant response bias as compared to low rates. Contrarily,
a low response rate indicates that the non-respondents are highly likely to differ from the
respondents in more ways than just their unwillingness to participate in the study.
According to Babbie whereas a response rate of 50 percent is adequate, a response of 60
percent is considered good whereas a 70 percent response rate is very good for analysis
and reporting.
33
Figure 4.1 Response Rate
4.2.2 Demographic Information
This section presents the findings of the features of the respondents in this study. The
respondents’ features include gender, age, number of years working in Safaricom Plc.,
and the position held by the respondents. This implies that the findings of the study were
based on all carder of respondents within the organization, which reflected the
elimination of bias and comprehensiveness of the results.
4.2.3 Representation by Gender
The respondents were asked indicate their gender. The findings showed that the female
respondents were 54.5 % whereas the male respondents were 45.5 %, which accounted
for a total of 86 males and 103 females. This indicated that both genders participated in
the study and the small difference in representation between the genders in terms of
percentages indicated the likelihood of balanced responses. The results were presented
in Figure 4.2.
71%
29%
RESPONSE RATE
Response Non Response
34
Figure 4.2: Representation by Gender
4.2.4 Representation by Age
The study sought to establish the age of the respondents. The findings showed that most
of the respondents (43.9%) were aged between 36 – 46 years; those who were aged
between 26 – 35 years were 32.2% whereas those aged between 18 – 25 years were 19%.
Those aged 45 years and above consist of the smaller category of respondents accounting
for 4.8%. This indicated that the views of all the age groups of the respondents were
represented in the study. Summary of the results are shown in Figure 4.3.
Figure 4.3: Representation by Age
4.2.5 Numbers of Years Working at Safaricom Plc.
45.50%,
54.50%,
Gender of respondents
FEMALE MALE
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
18 - 25 Yrs 26 - 35 Yrs 36 - 45 Yrs 45 Yrs & Above
18 - 25 Yrs 26 - 35 Yrs 36 - 45 Yrs 45 Yrs & Above
35
The study sought to establish the duration that the respondents had worked at the
organization. The findings showed that most of the respondents (41.8 %) had worked in
the organization for a period ranging between 0 – 5 years; 36% has worked in the
organization for a period between 6 – 10 years; 19 % had worked for a duration ranging
between 11 – 15 years whereas only 3.2% had worked for the company for more than 16
years. The findings of study were therefore, informed by a broad range of experiences of
the employees at the organization. The results were presented in Figure 4.4.
Figure 4.4: Numbers of Years Working at Safaricom Plc.
4.2.6 Representation by Organizational Position
The respondents were asked to indicate their position in the organization. The findings
of the study indicated that most of the respondents in the study (86.7%) were permanent
non-managerial staff; 9.6 % of the respondents were middle level managers whereas 3.7
% were top level. The study therefore, included views of staff members from various
levels within the organization. The findings are shown in Figure 4.5.
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
0-5 Yrs 6-10 Yrs 11-15 Yrs 16Yrs & Above
Number of Years Working at Safaricom PLC
0-5 Yrs 6-10 Yrs 11-15 Yrs 16Yrs & Above
36
Figure 4.5: Representation by Organizational Position
4.3 Innovation and Competitive Advantage
The first objective of the study was to establish the relationship between innovation and
competitive advantage. The innovation construct was further broken down into product
innovation, process innovation and market innovation. The respondents, therefore,
indicated their levels of agreement regarding various constructs of innovation based on
what they perceived how it related to organizational competitive advantage.
4.3.1 Descriptive Statistics for Innovation
The respondents were asked to indicate their levels of agreement regarding the
relationship between innovation and competitive advantage based on a five-point Likert
scale. The means and standard deviation of their responses were calculated and are
presented in Table 4.1.
0.00%
20.00%
40.00%
60.00%
80.00%
100.00%
Top Level Managers Mid Level Managers Permanent NonManagerial Staff
3.70%9.60%
86.70%
Representation by Organizational Position
Top Level Managers Mid Level Managers Permanent Non Managerial Staff
37
Table 4.1: Descriptive Statistics for Innovation
N M Std. Deviation
Product innovations results in the creation of improved
and new products that are easily differentiated at the
market place.
185 1.6108 .60782
Product innovation significantly contributes to the
improvement of product quality that satisfy the need of
distinct market segments.
185 1.6595 .63222
Innovative products have improved functionality that
make them unique at the market place.
185 1.7027 .67827
Innovative services have translated into fine and fast
systems that address the needs of specific market
segments.
185 1.8108 .65266
Process innovation lead to cheap operational costs that in
turn result into the delivery of cheap product and services
to the target market segments.
183 1.8033 .83508
Process innovation translates into enhanced efficiency of
service delivery, which increases customer satisfaction
due to satisfied consumer needs.
188 1.7979 .72510
Financial innovations in the organizations have yielded
unique services that has increased consumer subscribers.
188 1.8723 .73100
Process innovation has resulted into an enhanced supply
chain network that has helped reach new and dynamic
markets.
188 2.0000 .73127
Market innovation has helped the organization to reach
new market segments and attain new market positions by
uniquely accessing consumers.
188 1.7340 .68873
Marketing innovation positively affects the sales of a
product or service by increasing their demand in the
market.
188 1.8670 .70017
Market innovation is essential for helping the
organization to satisfying the needs of the consumers and
therefore edge out the competitors.
188 1.8564 .65047
Marketing innovation is essential for helping the
organization to reach higher levels of perceived quality
and loyalty, thereby increasing the market share.
187 1.7754 .64992
Valid N (listwise) 182
38
The findings showed that most of the respondents strongly agreed that product
innovations result in the creation of improved and new products that are easily
differentiated at the market place (M =1.6108; SD = .60782); most of the respondents
agreed that product innovation significantly contributes to the improvement of product
quality that satisfy the need of distinct market segments (M =1.6595; SD = .63222); most
of the respondents agreed that innovative products have improved functionality that
make them unique at the market place (M= 1.7027; SD = .67827); most of the
respondents strongly agreed that innovative services have translated into fine and fast
systems that address the needs of specific market segments (M= 1.8108; SD =.65266).
The findings also showed that most of the respondents agreed that process innovation
lead to cheap operational costs that in turn result into the delivery of cheap product and
services to the target market segments (M= 1.8033; SD = .83508); most of the
respondents agreed that process innovation translates into enhanced efficiency of service
delivery, which increases customer satisfaction due to satisfied consumer needs (M=
1.7979; SD=.72510); most of the respondents agreed that financial innovations in the
organizations have yielded unique services that has increased consumer subscribers
(M=1.8723; SD=.73100). besides most respondents also agreed that process innovation
has resulted into an enhanced supply chain network that has helped reach new and
dynamic markets (M= 2.0000; SD=.73127).
In regards to market innovation, most of the respondents agreed that market innovation
has helped the organization to reach new market segments and attain new market
positions by uniquely accessing consumers (M = 1.7340; SD= .68873); most respondents
agreed that market innovation positively affects the sales of a product or service by
increasing their demand in the market (M=1.8670; SD=.70017). Furthermore, most
respondents indicated that market innovation is essential for helping the organization to
satisfying the needs of the consumers and therefore edge out the competitors (M= 1.8564;
SD= .65047) and also most respondents indicated that market innovation is essential for
helping the organization to reach higher levels of perceived quality and loyalty, thereby
increasing the market share (M=1.7754; SD =.64992).
The descriptive analysis of the innovation construct yielded a mean range of between 1.6
and 2.0 which indicate that in most of the constructs, the respondents agreed that they
39
were related to the development of the competitive advantage in the organization. The
range of the standard deviation of the responses was between SD = .60782 and
SD=.73127. The range indicates very slight variation about the responses provided in the
process of measuring the innovation construct.
4.3.2 Correlational Analysis between Innovation and Competitive Advantage
Correlational analysis was conducted to establish the degree of the relationship between
innovation and competitive advantage. The findings indicated in Table 4.2 show that
there was a statistically significant and positive between innovation and competitive
advantage r (182) =0.468, p < 0.05. These findings implied that an increase in innovation
will in turn translate to increased competitive advantage.
Table 4.2: Correlational Analysis between Innovation and Competitive Advantage
Innovation Competitive
Advantage
Innovation Pearson
Correlation
1 .468**
Sig. (2-tailed) .000
N 182 182
Competitive
Advantage
Pearson
Correlation
.468** 1
Sig. (2-tailed) .000
N 182 188
**. Correlation is significant at the 0.01 level (2-tailed).
4.3.3 Regression Analysis of Innovation and Competitive Advantage
A bivariate regression analysis was conducted to establish the relationship between
innovation and competitive advantage to determine whether any changes in innovative
initiatives by the organization influenced changes in the company’s competitive
advantage.
4.3.4 Model Summary for Innovation and Competitive Advantage
40
As indicated in Table 4.3 innovation influenced the competitive advantage of the
organization. The adjusted R2 = 21 indicated that 21 % of the competitive advantage of
the organization was derived from innovation.
Table 4.3: Model Summary
Model R R Square Adjusted R
Square
Std. Error of
the Estimate
1 .468a .219 .214 .37841
a. Predictors: (Constant), Innovation
4.3.5 ANOVA for Innovation and Competitive Advantage
The findings of the study showed that the relationship between innovation and
competitive advantage was significant (F= 50.928, p-value (sig) =0.000). This indicated
that the model used was statistically significant and that innovation was associated with
competitive advantage. Therefore, the regression model that was used was significant in
explaining the relationship between innovation and competitive advantage. The results
of the analysis are shown in Table 4.4.
Table 4.4: ANOVA for Innovation
ANOVAb
Model Sum of
Squares
df Mean
Square
F Sig.
1 Regression 7.220 1 7.220 50.423 .000a
Residual 25.775 180 .143
Total 32.996 181
a. Predictors: (Constant), Innovation
b. Dependent Variable: Competitive Advantage
4.4.5 Regression Coefficient for Innovation and Competitive Advantage
The findings in Table 4.5 shows that innovation predicted competitive advantage in the
organization (β = 0.468; t = 7.101, p < .01). These findings demonstrate that an increase
41
in innovation will in turn translate to increased competitive advantage as a result of their
linear correlation.
Table 4.5: Regression Coefficient for Innovation
Coefficient’s
Model
Unstandardized
Coefficients
Standardized
Coefficients
t
Sig. B Std. Error Beta
1 (Constant) .929 .131 7.084 .000
Innovation .506 .071 .468 7.101 .000
a. Dependent Variable: Competitive Advantage
4.4 Organizational Resources and Competitive Advantage
The study measured the relationship between organizational resources and competitive
advantage. The indicators of this second research objective were further categorized as
intellectual property, organizational culture and brand equity.
4.4.1 Descriptive Analysis for Organizational Resources and Competitive
Advantage
The respondents were asked to indicate their levels of agreement regarding the
relationship between organizational resources and competitive advantage based on a
five-point Likert scale. The means and standard deviation of their responses were
calculated and are presented in Table 4.6.
42
Table 4.6: Descriptive Analysis for Organizational Resources and
Competitive Advantage
N Mean Std.
Deviation
Intellectual capital provides a significant differentiator in
the marketplace when the competitors are unable to
imitate a firm’s competence and capabilities.
188 1.8883 .59703
Intellectual capital helps the organization to improve its
processes, enhance its products and services that address
the needs of the consumers.
188 2.0266 .65760
Intellectual property has helped the organization to attract
high numbers of customers and also increase the number
of subscribers by providing unique financial and
communication products and services.
188 2.0585 .72524
Firms are increasingly relying on the management of
intellectual knowledge to add value to their knowledge
workers, interactions and products.
188 1.9628 .64890
The development of affordable and unique products and
services relies on organizational culture that promote and
rewards innovation.
188 1.8830 .63509
Organization cultures that support collaboration results in
the development of services that are differentiated by
quality delivery.
188 1.8777 .73195
Sound organizational cultures eliminate uncertainty
leading to the improved productivity that targets
respective markets with affordable goods and services.
188 1.9202 .58412
Organizational cultures influence the quality of processes
and procedures in firms, which determine the uniqueness
and relevance of their products and services.
188 1.8830 .63509
The development of strong brand equity helps
organization to create market niche through strong brand
associations with the consumers.
188 1.8245 .53342
Strong brand equities increased the brand awareness
within the market place thereby edging out rival firms.
188 1.9255 .66605
Organizations with strong brand equity can charge more
on their products and services as compared to their rivals.
188 2.0957 .77486
With a strong brand equity, the company enjoys a
significant barrier to new entrants in the industry.
188 2.0585 .68738
Valid N (listwise) 187
43
In regards to the relationship between intellectual property and competitive advantage
most respondents agreed that intellectual capital provides a significant differentiator in
the marketplace when the competitors are unable to imitate a firm’s competence and
capabilities (M=1.8883; SD=.59703); most respondents agreed that intellectual capital
helps the organization to improve its processes, enhance its products and services that
address the needs of the consumers (M=2.0266; SD = .65760).
Additionally, most respondents agreed that intellectual property helped the organization
to attract high numbers of customers and increased the number of subscribers by
providing unique financial and communication products and services (M=2.0585;
SD=.72524); most respondents agreed that organizations are increasingly relying on the
management of intellectual knowledge to add value to their knowledge workers,
interactions and products (M=1.9628; SD=.64890).
The findings of the study also indicated that the respondents agreed with all the constructs
that measured the relationship between organizational culture and competitive
advantage. Most of the respondents agreed that the development of affordable and unique
products and services relies on organizational culture that promote and rewards
innovation (M=1.8830; SD= .63509); most respondents agreed that organizational
cultures that support collaboration results in the development of services that are
differentiated by quality delivery (M=1.8777; SD=.73195).
Most respondents agreed that sound organizational cultures eliminate uncertainty leading
to the improved productivity that targets respective markets with affordable goods and
services (M=1.9202; SD=.58412); most respondents also agreed that organizational
culture influenced the quality of processes and procedures in firms, which determine the
uniqueness and relevance of their products and services (M=1.8830; SD=.63509).
The findings of the study indicated that most respondents agreed that strong brand equity
helps the organization to create market niche through strong brand associations with the
consumers (M=1.8245; SD=.53342); most respondents agreed that strong brand equities
increased the brand awareness within the market place thereby edging out rival firms
(M=1.9255; SD=.66605). Besides, most respondents agreed that organizations that have
strong brand equity can charge more on their products and services as compared to their
44
rivals (M=2.0957; SD=.77486); most respondents also agreed that with a strong brand
equity, the company enjoys a significant barrier to new entrants in the industry
(M=2.0585; SD=.68738).
The descriptive analysis of the organizational resources construct yielded a mean range
of between 1.8 and 2.0 which showed that there was a high level of agreement amongst
the respondents regarding various measured indicators of this variable regarding their
relationship to competitive advantage. The range of the standard deviation of the
responses was between SD =.59703 and SD=.77486. The range indicates very slight
variation about the responses provided in the process of measuring the innovation
construct.
4.4.2 Correlational Analysis between Organizational Resources and Competitive
Advantage
Correlational analysis was conducted to establish the degree of the relationship between
organizational resources and competitive advantage. The findings indicated in Table 4.7
show that there was a statistically significant and positive between innovation and
competitive advantage r (187) =0.422, p < 0.05. These findings implied that an increase
in organizational resources enhanced the competitive advantage of the organization.
Table 4.7: Correlational Analysis between Organizational Resources and
Competitive Advantage
Correlations
Organizational
Resources
Competitive
Advantage
Organizational
Resources
Pearson
Correlation
1 .422**
Sig. (2-tailed) .000
N 188 187
Competitive Advantage Pearson
Correlation
.422** 1
Sig. (2-tailed) .000
N 187 187
**. Correlation is significant at the 0.01 level (2-tailed).
45
4.4.3 Regression Analysis for Organizational Resources
A bivariate regression analysis was conducted to establish the relationship between
organizational resources and competitive advantage to determine whether any changes
in innovative initiatives by the organization influenced changes in the company’s
competitive advantage.
4.4.4 Model Summary for Organizational Resources and Competitive Advantage
In Table 4.8 it is shown that organizational resources influenced the competitive
advantage of the organization. The adjusted R2 = 17 indicated that 17 % of the
competitive advantage of the organization was influenced by the utilization of
organizational resources.
Table 4.8: Model Summary for Organizational Resources
Model Summary
Model R R Square Adjusted R
Square
Std. Error of
the Estimate
1 .422a .178 .173 .38936
a. Predictors: (Constant), Organizational Resources
4.4.5 ANOVA for Organizational Resource and Competitive Advantage
The findings of the study showed that the relationship between organizational resources
and competitive advantage was significant (F= 39.986, p-value (sig) =0.000). This
indicated that the model used was statistically significant and that innovation was
associated with competitive advantage. Therefore, the regression model that was used
was significant in explaining the relationship between organizational resources and
competitive advantage. The results of the analysis are shown in Table 4.9.
46
Table 4.9: ANOVA for Organizational Resources
ANOVAb
Model Sum of
Squares
df Mean
Square
F Sig.
1 Regression 6.062 1 6.062 39.986 .000a
Residual 28.046 185 .152
Total 34.108 186
a. Predictors: (Constant), Organizational Resources
b. Dependent Variable: Competitive Advantage
4.4.6 Regression Coefficient for Organizational Resources
The findings in Table 4.10 showed that organizational resources predicted competitive
advantage in the organization (β = 0.422, t = 6.323, p < .01). These findings demonstrate
that an increase in organizational resources will in turn translate to increased competitive
advantage as a result of their linear correlation.
Table 4.10: Regression Coefficient for Organizational Resources and Competitive
Advantage
Coefficientsa
Model
Unstandardized
Coefficients
Standardized
Coefficients
B Std.
Error
Beta t Sig.
1 (Constant) .794 .168 4.729 .000
Organizational
Resources
.537 .085 .422 6.323 .000
a. Dependent Variable: Competitive Advantage
4.5 Organizational Capabilities and Competitive Advantage
The study measured the relationship between organizational capabilities and competitive
advantage. This third objective of the study was further broken down into three distinct
categories including customer service, knowledge management and distribution network.
47
4.5.1 Descriptive Analysis for Organizational Capabilities and Competitive
Advantage
The respondents were asked to indicate their levels of agreement regarding the
relationship between organizational capabilities and competitive advantage based on a
five-point Likert scale. The means and standard deviation of their responses were
calculated and are presented in Table 4.11.
48
Table 4.11: Descriptive Analysis for Organizational Capabilities and Competitive
Advantage
Descriptive Statistics
N Mean Std.
Deviation
Quality customer service leads to enhanced service
performance and consumer preference due to increased
consumer satisfaction.
189 1.4180 .51560
Customer services provides an effective market
differentiator that is reflected through increased market
share.
189 1.5556 .60436
Effective customer service leads to increased
understanding of consumers and therefore provide them
with goods and services that address their needs and wants
189 1.5397 .55040
Quality customer service leads to quick and effective
responses to customers’ request and grievances, thereby
establishing confidence, trust and loyalty.
187 1.4866 .57134
Effective knowledge management is required for firms to
development of unique and competitive products for
various market segments.
189 1.9577 .64272
Effective knowledge management is required for firms to
improve on their procedures and processes, which results
in the delivery of quality services to the consumers.
189 2.1217 .75864
Knowledge management promotes productivity, which
improves the delivery of unique services to the consumers.
189 2.0159 .71813
For competitiveness organizations required well-structured
distribution networks to make products and services easily
available to their target markets.
188 1.6702 .54505
Effective distribution network gives firms a competitive
edge through greater responsiveness that help them to
meet their consumer’s needs in a timely manner.
188 1.6649 .60253
Proper distribution networks help firms to remain
competitive by making effective forecasts, and improve on
their inventory management.
188 1.6277 .62023
Valid N (listwise) 186
The findings of the study show that most of the respondents strongly agreed that quality
customer service leads to enhanced service performance and consumer preference due to
increased consumer satisfaction (M=1.4180; SD= .51560); most of the respondents
49
agreed strongly agreed that customer services provides an effective market differentiator
that is reflected through increased market share (M=1.5556; SD=.60436).
Besides, most of the respondents strongly agreed that effective customer service leads to
increased understanding of consumers and therefore provide them with goods and
services that address their needs and wants (M=1.5397; SD=.55040); most respondents
also strongly agreed that quality customer service leads to quick and effective responses
to customers’ request and grievances, thereby establishing confidence, trust and loyalty
(M=1.4866; SD=.57134).
The findings indicated that most of the respondents agreed that effective knowledge
management was required for firms to development of unique and competitive products
for various market segments (M=1.9577; SD=.64272); most respondents agreed that
effective knowledge management was required for firms to improve on their procedures
and processes, which results in the delivery of quality services to the consumers
(M=2.1217; SD=.75864). Furthermore, most respondents agreed that knowledge
management promotes productivity, which improves the delivery of unique services to
the consumers (M=2.0159; SD=.71813).
Additionally, the findings of the study showed that most respondents agreed that for
competitiveness organizations required well-structured distribution networks to make
products and services easily available to their target markets (M=1.6702;SD=.54505);
besides, most respondents agreed that effective distribution network gives firms a
competitive edge through greater responsiveness that help them to meet their consumer’s
needs in a timely manner (M=1.6649;SD=.60253); most respondents also agreed that
proper distribution networks help firms to remain competitive by making effective
forecasts, and improve on their inventory management (M=1.6277;SD=.62023).
The descriptive analysis of the organizational capability construct yielded a mean range
of between 1.4 and 2.1, which showed that the level of agreement between strong
agreement and agreement was broadly varied amongst the respondents. Besides, the
range of the standard deviation of the responses was between SD =.51560 and
SD=.75864. The range indicates the broadness of variation of the responses regarding
the relationship between organizational capabilities and competitive advantage.
50
4.5.2 Correlational Analysis between Organizational Capabilities and
Competitive Advantage
Correlational analysis was conducted to establish the degree of the relationship between
organizational capabilities and competitive advantage. The findings indicated in Table
4.12 showed that there was a statistically significant and positive relationship between
organizational capabilities and competitive advantage r (187) =0.569, p < 0.05. These
findings implied that an increase in organizational resources enhanced the competitive
advantage of the organization.
Table 4.12: Correlational Analysis between Organizational Capabilities and
Competitive Advantage
Correlations
Org Capability Competitive
Advantage
Org Capability Pearson
Correlation
1 .569**
Sig. (2-tailed) .000
N 188 185
Competitive
Advantage
Pearson
Correlation
.569** 1
Sig. (2-tailed) .000
N 185 186
**. Correlation is significant at the 0.01 level (2-tailed).
4.5.3 Regression Analysis for Organizational Capabilities
A bivariate linear regression analysis was conducted to establish the relationship between
organizational capabilities and competitive advantage to determine whether any changes
in organizational capabilities by the organization influenced changes in the company’s
competitive advantage.
4.5.4 Model Summary for Organizational Capabilities
51
Table 4.13 shows that organizational capabilities influenced the competitive advantage
of the organization. The adjusted R2 = 32 indicated that 32% of the competitive
advantage of the organization was derived from organizational capabilities.
Table 4.13: Model Summary for Organizational Capabilities and Competitive
Advantage
Model
Summary
Model R R Square Adjusted R
Square
Std. Error of
the Estimate
1 .569a .324 .320 .34547
a. Predictors: (Constant), Organization Capability
4.5.5 ANOVA for Organizational Capabilities
The findings of the study showed that the relationship between organizational
capabilities and competitive advantage was significant (F= 87.727, p-value (sig) =0.000).
This indicated that the model used was statistically significant and that organizational
capabilities were associated with competitive advantage. Therefore, the regression model
that was used was significant in explaining the relationship between organizational
capabilities and competitive advantage. The results of the analysis are shown in Table
4.14.
Table 4.14: ANOVA for Organizational Capability and Competitive Advantage
ANOVAa
Model
Sum of
Squares df Mean Square F Sig.
1 Regression 10.470 1 10.470 87.727 .000b
Residual 21.841 183 .119
Total 32.312 184
a. Dependent Variable: COMPE
b. Predictors: (Constant), Organizational Capabilities
4.5.6 Regression Coefficient for Organizational Capabilities and Competitive
Advantage
52
Organizational capabilities predicted competitive advantage in the organization (β =
0.569, t = 9.366, p < .01) as shown in table 4.15. These findings demonstrate that an
increase in organizational capabilities increase the competitive advantage of the
company as a result of their linear correlation.
Table 4.15: Regression for Organizational Capability and Competitive Advantage
Coefficientsa
Model
Unstandardized
Coefficient
Standardized
Coefficients
t
Sig.
B
Std. Error
Beta
1 (Constant) .674 .126 5.358 .000
Org Capability .677 .072 .569 9.366 .000
a. Dependent Variable: Competitive Advantage
4.6 Chapter Summary
This chapter presented the results and findings of the study based on the objectives and
research questions. The data was collected from 267 questionnaires but only 189 were
successfully completed, which yielded a response rate of 70%. The analysis involved the
demographic information of the respondents such as gender, age, number of years
working at the organization and the positions that serve in the organization. The findings
also indicated the regression results of the relationship between the strategic factors
(independent variables) and the competitive analysis (dependent variable).
53
CHAPTER FIVE
5.0 DISCUSSION, CONCLUSION AND RECOMMENDATIONS
5.1 Introduction
This chapter presents the results of the study and a summary of the findings from the
analysis of data. The discussions of the data are based on the objectives of the study and
review of the relevant literature that was used in the study. The chapter also presents the
conclusion that was drawn from the study and the recommendation for improvements
and further studies in regards to the relationship between strategic factors and
organizational competitiveness.
5.2 Summary
The general objective of the objective of the study was to establish the relationship
between strategic factors and the competitive advantage at Safaricom Plc. The specific
objectives of the study included establishing a relationship between innovation and
competitive advantage; establishing the relationship between organizational resources
and competitive advantage; and establishing the relationship between organizational
capabilities and competitive advantage. The study adopted a combination of correlation
and descriptive survey designs. A descriptive correlations design was adopted for this
study. The findings of the study were based on a sample size of 267 Safaricom Plc.
employees drawn from a target population of 800 staff at the organization. The sample
included the top, middle level management and non-managerial staff. The questionnaire
was used to collect data from these respondents.
Most of the respondents strongly agreed that innovation affected competitive advantage
in terms of aspects such as creation of improved and new products that are easily
differentiated at the market place (M =1.6108; SD = .60782); increased customer
satisfaction due to satisfied consumer needs (M= 1.7979; SD=.72510); reaching new
market segments and attaining new market positions by uniquely accessing consumers
(M = 1.7340; SD= .68873).
The findings showed a statistically significant and positive relationship between
innovation and competitive advantage r (182) =0.468, p < 0.05. These findings implied
that an increase in innovation will in turn translate to increased competitive advantage.
54
The adjusted R2 = 21 indicated that 21 % of the competitive advantage of the
organization was derived from innovation. The findings of the study showed that the
relationship between innovation and competitive advantage was significant (F= 50.928,
p-value (sig) =0.000). This indicated that the model used was statistically significant and
that innovation was associated with competitive advantage. Therefore, the regression
model that was used was significant in explaining the relationship between innovation
and competitive advantage.
Most of the respondents strongly agreed that organizational resources influenced
competitive advantage by providing unique financial and communication products and
services (M=2.0585; SD=.72524); supporting collaboration results in the development
of services that are differentiated by quality delivery (M=1.8777; SD=.73195) and that
strong brand equities increased the brand awareness within the market place thereby
edging out rival firms (M=1.9255; SD=.66605). The correlational analysis showed that
there was a statistically significant and positive between innovation and competitive
advantage r (187) =0.422, p < 0.05.
These findings implied that an increase in organizational resources enhanced the
competitive advantage of the organization. The adjusted R2 = 17 indicated that 17 % of
the competitive advantage of the organization was influenced by the utilization of
organizational resources. The findings of the study showed that the relationship between
organizational resources and competitive advantage was significant (F= 39.986, p-value
(sig) =0.000). This indicated that the model used was statistically significant and that
innovation was associated with competitive advantage.
Most of the respondents strongly agreed that organizational capability influenced
competitive advantage in terms of elements such as enhancing service performance and
consumer preference due to increased consumer satisfaction (M=1.4180; SD= .51560);
knowledge management promotes productivity, which improves the delivery of unique
services to the consumers (M=2.0159; SD=.71813); and that a well-structured
distribution networks is required to make products and services easily available to their
target markets (M=1.6702;SD=.54505).
55
The correlational analysis showed that there was a statistically significant and positive
relationship between organizational capabilities and competitive advantage r (187)
=0.569, p < 0.05. These findings implied that an increase in organizational resources
enhanced the competitive advantage of the organization. The adjusted R2 = 32 indicated
that 32% of the competitive advantage of the organization was derived from
organizational capabilities. The findings of the study showed that the relationship
between organizational capabilities and competitive advantage was significant (F=
87.727, p-value (sig) =0.000). This indicated that the model used was statistically
significant and that organizational capabilities were associated with competitive
advantage. Therefore, the regression model that was used was significant in explaining
the relationship between organizational capabilities and competitive advantage.
5.3 Discussion
5.3.1 Innovation and Competitive Advantage
The first objective of the study was to examine the relationship between innovation and
competitive advantage. The indicators of interest in this study included product
innovation, process innovation, and market innovation. The findings of the study showed
that the relationship between innovation and competitive advantage was positive and
significant (r (182) =0.468, p < 0.05), which meant that organization that increasingly
invests in innovation invariably increase their capacity for attaining competitive
advantage at the marketplace. Previous studies such as Reguia (2014) also found that
firms enhance their competitiveness by adopting product innovation approaches such as
research and development; motivating product innovators; promoting efficient
innovation policies and programs.
There results also showed that product innovation also contributed to the improvement
of product quality leading to increased customer satisfaction. The findings concurred
with those by Auma, (2014) who found that competitive advantage of organizations is
dependent on its capacity to benefit from its product innovation initiatives. This is
because the development of new products makes it easier for consumers to use them,
thereby boosting their satisfaction.
Besides, the findings demonstrated that product innovation improves product quality and
functionality, thereby addressing consumer needs. The study also established that
56
product innovation improves the features and functionality of products. These findings
agree with those by Gachigo, Kahuthia and Muraguri (2019) who established that
constant modification of products through experimenting on creative ideas improved on
their quality and resulted in their wider reception in the marketplace.
The results of the study indicated that innovative services result in efficient systems that
are effective when it comes to addressing specific market segment needs. These findings
are affirmed by previous studies such as Noorani (2014) who found that the introduction
of more innovative services was critical in edging out their competitors in the
marketplace. Therefore, service innovation has leveraged on technological development
to realize the fastest and finest system that adequately addresses the needs of the market
and therefore facilitates the competitiveness of firms in specific industries.
In regards to process innovation, the study established that process innovations are
essential for cutting down operational costs and therefore result into the delivery of cheap
products and services to target markets. In her study, Auma (2014) established that
process innovation resulted in competitive advantage as it helped firms to reduce the unit
costs of delivery or production, even as it increased the quality of product or service that
is produced. In another study, Ogbo, Okechukwu and Ukpere (2012) also found that
process innovation lead to the creation of new, cheaper and better products and services
that their customers can use, yet their competitors cannot provide. Therefore, a
competitive advantage is derived from the capacity of a business firm to do or make
things that are better or cheaper.
Based on the findings of the study process innovation is also brings about enhanced
efficiency in service delivery that translates into customer satisfaction. These findings
concur with those by Veerendrakumar and Shivashankar (2015) who found out effective
process innovation translated into the development of a robust supply chain could boost
formal cooperation and inject impetus in business by improving the competitive
advantage through continuous innovation.
The results also showed that process innovation in form of financial innovation results
into unique services that have increased customer subscription. It also enhanced the
supply chain network increased the firm’s capacity to reach new and dynamic markets.
57
These findings concur with those by Ogbo et al., (2012) who found that process
innovation resulted into customer satisfaction, increased market share, increased return
in sales, and increased profitability.
Mathenge (2013) established that financial innovation spurred growth in
telecommunication companies by giving them a competitive advantage. Furthermore, the
findings of the study showed that through market innovation organization increase their
capacity of reaching new market segments and attaining new market positions by
accessing new customers. Market innovation increases the demand for products and
services, increasing their sales.
The findings agree with those by Auma (2014) who established that marketing
innovation targets addressing the needs of the consumers, penetrating new markets
and/or repositioning a product in the market with the aim of increasing its sales; it is
therefore, closely related to the four marketing Ps. The results also showed that market
innovation also helps organizations to understand and satisfy the needs of their
customers, therefore giving them a competitive edge. Furthermore, market innovation
help organization to attain higher levels in terms of perceived quality and loyalty, which
in turns increases their market share.
The study by Ungerman, Dedkova and Gurinova (2018) agrees with these findings as it
established that that marketing innovation help firms build their public relations and
therefore increase the value of their business. Joueid and Coenders (2018) also found out
that marketing innovation led to innovative product design, pricing, packaging,
promotion, and placement strategies are promising sources of product performance,
creating sustainable competitive advance for firms.
5.3.2 Organizational Resources and Competitive Advantage
The second objective of the study was investigating the relationship between
organizational resources and competitive advantage. The objective was measured based
on dimensions of organizational resources including intellectual property, organizational
culture, and brand equity. The findings showed that the relationship between
organizational resources and competitive advantage was statistically positive and
58
significant (r (187) =0.422, p < 0.05). The findings affirmed that an increase in
organizational resources enhanced the competitive advantage of the organization.
The results of the study showed that intellectual property provides critical identifiers at
the marketplace that cannot be easily imitated by competitors. Intellectual property helps
organizations to improve on their processes enhance its products and services that
address the needs of the consumers. Laban and Deya (2019) which concluded that
intellectual capital gives firms a sustainable competitive advantage, as it is used to
improve processes, enhance products and services and address customer needs. They
also found that intellectual capital becomes a significant differentiator in the marketplace
when the competitors are unable to imitate a firm’s competence and capabilities.
Based on the results of the study the organizational culture that promote and reward
innovation, which incentivize the development of affordable and unique products and
services. Besides, organizational cultures that support collaboration results in the
development of services that are differentiated by quality delivery. Bogdanowicz (2014)
also found the same results, establishing established that organizational culture provides
the foundation for building a firm’s identity, desired organizational behavior and external
image.
Furthermore, the results showed that organizational cultures that eliminate uncertainty
promote productivity, leading to the production of affordable goods and services. These
findings concurred with Ahmed and Shafiq, (2014) which showed that organizational
culture helps to avoid higher uncertainty, which leads to improved productivity, hence
creating competitiveness. Similar findings are reflected in Mwendwa (2017) that found
out that multidimensional culture significantly increased the delivery of services in the
telecom companies. Consequently, in the development of improved or new products and
services that did not just lead to market penetration but also increased customer
satisfaction levels.
The study found that brand equity helps organization to create strong associations with
customers and thus develop market niche. Brand equity translated into brand awareness
and thus increased market competitiveness. The findings concurred with Amegbe et al.
(2016) which found that consumer-based brand equity is realized when customers have
59
a high level of awareness with the brand, and also have some unique and favorable
associations with the brand. Therefore, the competitiveness of the organization is based
on the development of strong brand equity, which translates into brand association and
brand awareness amongst the consumers.
The study also found that with strong brand equity organizations can charge more on
their products and services as compared to their rivals; and enjoys a significant barrier to
new entrants in the industry. The findings reflect that of a similar study by Buzdar et al.
(2016) which found that high brand equity companies are able to charge more than their
rivals. Chepkwony et al. (2018) also found that that strong brand equity is essential for
enhancing the value of the proprietary firm and also facilitates positive effective in the
manner customers end up perceiving a brand, thereby, eliciting favorable consumer
behavior.
5.3.3 Organizational Capabilities and Competitive Advantage
The third objective of the study was examining the influence of organizational
capabilities on the competitive advantage of organizations. In this study organizational
capabilities were measured based three dimensions that included customer service,
knowledge management and distribution networks. The findings showed that the
relationship between organizational capabilities and competitive advantage is
statistically positive and significant (r (187) =0.569, p < 0.05), which indicated that an
increase in organizational resources enhanced the competitive advantage of the
organization.
The results of the study showed that effective customer service enhanced service
performance and consumer preference due to increased consumer satisfaction. Customer
service provides an effective market differentiator that is reflected through increased
market share. These findings are consistent with those of previous other studies such as
Wouters (2001) who found that effective customer service leads to enhanced service
performance and the desired market response; it also reflects in terms of customer
satisfaction, positive customer attitude, increased repurchase intention, increased market
share and also increased turnover.
60
The findings of the study showed that effective customer service translates into increased
understanding of consumers that leads to provision of goods and services that address
their needs and wants. These findings are similar to those of the study by Srivastava and
Bhatnagar (2012) who established that mobile telecom service providers invest in taking
care of their subscribers by understanding their respective needs and wants, addressing
their grievances and problems promptly and providing them with good quality service;
this, in turn, translates into customer loyalty, which makes the service providers edge out
their competitors. Mäntymaa (2013) also found that having satisfied customers was not
enough to assure the companies of the loyal market base; only very satisfied customers
counted as the competitive edge, as they could even recruit more by recommending them
to use the products and services that the companies provided.
Besides, the study found that effective customer services lead to quick and effective
responses to customers’ request and grievances, thereby establishing confidence, trust
and loyalty. Yeboah and Ewur (2014) concurs with these findings whereby they
established that quality customer service was critical to telecom companies in their quest
to achieve and maintain sustainable competitive advantage because they are able to
establish customer confidence and trust.
The results of the study showed that knowledge management led to the development of
unique and competitive products for various market segments. Knowledge development
improves the procedures and processes in organizations resulting in the delivery of
quality services to the consumers. Besides, knowledge management increases
productivity which manifests in the form of improved unique service delivery for the
consumers. Similar studies conducted previously have concurred with these findings.
According to Rahimli (2012) knowledge management is especially critical when the
production and processes of the firm rely on human capital and intellectual capital for
productivity. Nasimi et al.(2013) found that knowledge management is critical in helping
the organization in the identification, selection, organization, and sharing of information
and skills that the organization requires to solve its problems, make strategic plans and
undertake dynamic decision-making processes.
61
The study found that a well-structured distribution network makes products and services
easily available to their target markets. Effective distribution networks give firms a
competitive edge through greater responsiveness that help them to meet their consumer’s
needs in a timely manner. Besides, effective distribution networks help firms to remain
competitive by making effective forecasts, and improve on their inventory management.
Previous studies that have examined the same construct have come up with similar
results.
Ndung’u, (2012) found out that effective distribution strategies yield a robust distribution
network, which enables firms to outperform their competitors in terms of sales.(Maqbool
et al., 2014) established that with proper distribution, channel firms are able to make
effective forecasts, plan production, improve on their inventory management and
distribution, which are key in achieving a competitive edge in competitive markets.
5.4 Conclusion
5.4.1 Innovation and Competitive Advantage
Innovation is an important strategy for ensuring the competitiveness of organizations at
the marketplace. The three dimensions of innovation in this case include product
innovation, process innovation and market innovation. Product innovation results into
the development of quality, differentiated products and also effective and efficient
services that adequately address the needs of the various specific market segments. The
adoption of process innovation translates into affordable products for markets due to the
reduction of operational costs. It also enables organizations to enhance their supply chain
network and tap into new and dynamic markets and enhances the efficiency of service
delivery, which increases customer satisfaction.
Besides, market innovation increases the capacity of organizations to understand their
markets better, increase the demand for their products and services, and reach new
market niches. Market innovation is therefore, essential for enhancing customer
satisfaction, increasing the market share through entrenching customer loyalty and,
therefore, developing a competitive edge at the marketplace. Therefore, the more
organization invest on either or all components of innovation the more they increase the
capacity for competitiveness at the marketplace.
62
5.4.2 Organizational Resources and Competitive Advantage
Organizational resources are critical predictors of competitiveness of organizations in the
marketplace. The dimensions of organizational resources include intellectual property,
organizational culture, and brand equity. Intellectual property helps organizations to
sustain their competitive edge by providing critical identifiers that are inimitable. It also
helps organization to attract new and more customers by enabling the creation of
innovative products that uniquely address their needs. It is also an essential consideration
for organization that seek to increase their competitiveness through adding the values of
their knowledge workers, interactions and products.
Organizational culture promotes the attainment of competitive advantage in various
ways. Organizational cultures that reward innovation incentivize the creation of unique
and affordable products and services. The organizational cultures that support
collaborations lead to the of services that are differentiated by quality delivery and
uniqueness at the marketplace. Those organizational cultures that have eliminated
uncertainty have enhanced employee productivity, which manifests in the creation of
affordable products and services.
Through investing in brand equity organization create develop strong brand associations
that result in market niches and increase their competitiveness through enhanced brand
awareness. With strong brand equity organizations can charge more for their products
and services as compared to competitors and also restrict new entrants into their industry.
In sum, increased investment in the organizational resources invariably increases the
competitive capacities of organizations.
5.4.3 Organizational Capabilities and Competitive Advantage
Organizational capabilities influence the competitiveness of organizations at the
marketplace. Organizational capabilities manifest through dimensions such as customer
service, knowledge management and distribution networks. Customer service enhance
service performance leading to customer satisfaction; it also provides an effective market
differentiator leading to increased market share. Effective customer service leads to
effective and quick responses to customer complaints and better provision of products
and services through increased understanding of the market.
63
Effective knowledge management leads to improved organizational procedures and
process that translate into the production of unique and competitive product and, the
delivery of quality services to target markets. Besides, effective distribution networks
increase the access of goods and services to the target market; they help meet customers’
need in a timely manner, thereby increasing market responsiveness and competitiveness.
Therefore, the more organization invest on either or all components of their
organizational capabilities the more they increase the capacity for competitiveness at the
marketplace.
5.5 Recommendations
5.5.1 Recommendations for Improvements
5.5.1.1 Innovation and Competitive Advantage
The study recommends that Safaricom Plc. invests in product innovation, process
innovation and market innovation as a strategy for addressing the various needs of their
market segment, thereby gaining a competitive edge in the industry.
5.5.1.2 Organizational Resources and Competitive Advantage
The study recommends that Safaricom Plc., broadens its organizational resources in
terms of intellectual property, organizational culture and brand equity as a way of
building its capacity for competitiveness in the sector.
5.5.1.3 Organizational Capabilities and Competitive Advantage
The study recommended that Safaricom Plc., further develops its organizational
capabilities in terms of customer service, knowledge management and distribution
networks as a means of assuring its continued competitiveness in the marketplace.
5.5.2 Recommendations for Further Studies
The findings of this study are based on one telecommunication company in Kenya since
the research was based on the case of Safaricom Plc. Further studies should be conducted
on organization in other economic sectors to find out if the findings of the study can be
generalized to them as well.
64
REFERENCES
Ahmed, A. I. (2019). Effects of generic strategies on competitive advantage in
telecommunication industry in Kenya: a case of Safaricom ltd. United States
International University - Africa.
Ahmed, M., & Shafiq, S. (2014). The Impact of Organizational Culture on
Organizational Performance: A Case Study of Telecom Sector. Journal of
Management and Business Research: Administration and Global Management,
14(3), 1–11.
Ahuja, K., & Katila, P. (2014). Building organisational capability: Your future, your
business. Journal of Strategic Management, 11(8), 5–16.
Akhtar, I. (2016). Research Design. International Journal of Research (IJR), 1(11), 17.
Amegbe, H., Hanu, C., & Atunwey, R. (2016). Customer based brand equity and the
competitive performance of private universities in Ghana. Domonion Univesity.
Andrew, J. P., Manget, J., Micheal, D. C., Taylor, A., & Zablit, H. (2010). Innovation
2010 - A Return to prominence and the emergence of a new world order. Boston,
MA.
Anning-Dorson, T. (2018). Innovation and competitive advantage creation: The role of
organisational leadership in service firms from emerging markets. International
Marketing Review, 35(4), 580–600. https://doi.org/10.1108/IMR-11-2015-0262
Arunda, C. O. (2015). The influence of innovation on competitive advantage: a case of
MPESA. United States International University.
Atuahene-Gima, K. (2005). Resolving the capability-rigidity paradox in new product
innovation. Journal of Marketing, 69(4), 61–83.
Auma, L. O. (2014). The role of innovation in building competitive advantage in
horticultural processing and export companies in Nairobi Kenya. Univeristy of
Nairobi.Retrieved from
https://pdfs.semanticscholar.org/f266/6f4022d65b881cb1dcb4105fbfe95eee06fd.p
d
65
Babbie, E. (2010). The Practice of Social Research. (12th ed.). California: W. C.
Learning.
Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of
Management, 17(1), 99–120. https://doi.org/10.1177/014920639101700108
Barney, J. (2014). Gaining and sustaining competitive advantage. Harlow : Pearson
Education Limited.
Best, W. B., & Kahn, J. V. (2005). Research in Education (9th ed.). New Delhi, India:
Prentice-Hall India.
Bogdanowicz, M. (2014). Organizational Culture as a Source of Competitive Advantage:
Case Study of a Telecommunication Company in Poland. International Journal of
Contemporary Management, 13(3), 53–66.
Brem, A., Maier, M., & Wimschneider, C. (2016). Competitive advantage through
innovation: The case of Nespresso. European Journal of Innovation Management,
19(1), 133–148.
Bryden, N. (2019). The telecommunications industry in Kenya 2019.
Buzdar, M. F., Janjua, S. Y., & Khurshid, M. A. (2016). Customer-based brand equity
and firms’ performance in the telecom industry. International Journal of Services
and Operations Management, 25(3), 334–336.
Cao, Z., Huo, B., Li, Y., & Zhao, X. (2015). Competition and supply chain integration:
A taxonomy perspective. Industrial Management and Data Systems, 115(5), 923–
950. https://doi.org/10.1108/IMDS-10-2014-0315
Castro, V. A., & Giraldi, J. de M. E. (2018). Shared brands and sustainable competitive
advantage in the Brazilian wine sector. International Journal of Wine Business
Research, 30(2), 243–259.
Chatzoglou, P., & Chatzoudes, D. (2018). The role of innovation in building competitive
advantages: an empirical investigation. European Journal of Innovation
Management, 21(1), 44–69. https://doi.org/10.1108/EJIM-02-2017-0015
Chepkwony, D., Langat, L., Rop, W., & Naibei, I. (2018). Influence of brand equity on
financial performance of mobile telecommunication firms in Nairobi, Kenya.
66
International Journal of Economics, Commerce and Management, 6(9), 487–531.
Christensen, C. (2001). The past and future of competitive advantage. MIT Sloan
Management Review, 42(2), 105.
Communications Authority of Kenya. (2018). First quater sector statistics report for the
financial year 2018 / 2019. Nairobi.
Contractor, F. J. (2013). Punching above their weight: The sources of competitive
advantage for emerging market multinationals. International Journal of Emerging
Markets, 8(4).
Cooper, R., & Schindler, P. (2014). Business Research Methods (12th editi). Kent State:
McGraw-Hill Education.
Distanont, A., & Khongmalai, O. (2018). The role of innovation in creating a competitive
advantage. Kasetsart Journal of Social Sciences, 1–7.
https://doi.org/10.1016/j.kjss.2018.07.009
Executive Research Associates. (2009). Safaricom limited. Retrieved from
https://www.ide.go.jp/English/Data/Africa_file/Company/kenya03.html
Ezenewa, P. (2016). Social corporate responsibility: A tool of achieving and maintaining
competitive advantage: an assessment of Safaricom Kenya Limited. United States
International University- Africa.
Frost & Sullivan. (2018). Digital market overview : Kenya overview & methodology.
Retrieved from https://www.dw.com/en/mobile-solutions-a-catalyst-for-internet-
penetration-in-kenya/a-47078206
Gachigo, S. M., Kahuthia, J., & Muraguri, C. (2019). Exploration innovative strategy
and performance of the telecommunication industry in Kenya: A case of Safaricom
plc in Nairobi metropolis. International Academic Journal of Human Resource and
Business Administration, 3(6),(6), 299–319.
Gautam, D. K., & Bhandari Ghimire, S. (2017). Psychological empowerment of
employees for competitive advantages: An empirical study of Nepalese service
sector. International Journal of Law and Management, 59(4), 466–488.
https://doi.org/10.1108/IJLMA-03-2016-0035
67
Gillwald, A., & Mureithi, M. (2011). Regulatory intervention or disruptive competition?
Lessons from East Africa on the end of international mobile roaming charges. Info,
13(3), 32–46. https://doi.org/10.1108/14636691111131439
Hout, T., Porter, M. E., & Rudden, E. (1982). How global companies win out. Harvard
Business Review, 98.
Hsu, D. H., & Ziedonis, R. H. (2013). Resources as dual sources of advantage:
Implications for valuing entrepreneurial- firm patents. Strategic Management
Journal, 34, 761–781. https://doi.org/10.1002/smj
Huang, K. F., Dyerson, R., Wu, L. Y., & Harindranath, G. (2015). From temporary
competitive advantage to sustainable competitive advantage. British Journal of
Management, 26(4), 617–636. https://doi.org/10.1111/1467-8551.12104
International Plant Nutrition Institute. (n.d.). Retrieved October 1, 2018, from
http://www.ipni.net/about
Joueid, A., & Coenders, G. (2018). Marketing innovation and new product portfolios: A
compositional approach. Journal of Open Innovation, 4(19), 1–13.
Kanagal, N. B. (2015). Innovation and product innovation in marketing strategy. Journal
of Management and Marketing Research, 18, 1–25.
Kelchner, L. (2020). The Importance of organizational capability. Huston Chronicles.
Retrieved from https://smallbusiness.chron.com/importance-organizational-
capability-13295.html
Kurt Christensen, H. . (2010). Defining customer value as the driver of competitive
advantage. Strategy and Leadership, 38(5), 20–25.
https://doi.org/10.1108/10878571011072048
Laban, O. M., & Deya, J. (2019). Strategic innovations and the performance of
information communication technology firms in Nairobi Kenya. International
Journal of Academic Research in Progressive Education and Development, 8(2),
1–24.
Laura, M., Amoro, G., Wang, Z., & Gondje-Dacka, I.-M. (2016). An Applied Study on
Brand Equity: Factors Affecting Brand Equity Case Study of Mtn Telecom
Cameroon. European Journal of Business and Management, 8(9), 151–170.
68
Lavrakas, P. (2018). Encyclopedia of survey research methods. Sage Publications, Inc.,
Thousand Oaks. In Encyclopedia of survey research methods. Sage Publications,
Inc., Thousand Oaks.
Mäntymaa, J. (2013). Gaining of competitive advantage through quality of services in
financial industry. University of Oulu.
Maqbool, S., Rafiq, M., Imran, M., Qadeer, A., & Abbas, T. (2014). Creating competitive
advantage through supply chain management (role of information &
communication technology in supply chain management to create competitive
advantage: a literature base study). International Journal of Research in Commerce,
IT & Management, 4(2), 47–52.
Mathenge, J. (2013). Effects of financial innovation on competitive advantages of
telecommunication companies in Kenya. ,. Univeristy of Nairobi.
Meihami, B., & Meihami, H. (2014). Knowledge management a way to gain a
competitive advantage in firms (evidence of manufacturing companies).
International Letters of Social and Humanistic Sciences, 14, 80–91.
Molenberghs, G. (2013). Diagnosing misspecification of the random-effects distribution
in mixed models. Leuven.
Mugenda, O, M., & Mugenda, A, G. (2007). Research Methods; Quantitative and
Qualitative Approaches. Nairobi: Acts Press.
Mugenda, A. G. (2011). Social science research: Theory and principles. Nairobi:
Applied Research& Training Press Services.
Muthee, K. M. (2014). Knowledge management as a strategic tool for competitive
advantage at Safaricom Limited Kenya. Univeristy of Nairobi.
Mwanza, P., & Ingari, B. (2015). Strategic role of distribution as a source of competitive
advantage in fast-moving consumer goods in Kenya. International Journal of
Scientific and Research Publications, 5(10), 1–15.
Mwendwa, M. (2017). Effects of Multidimensional Culture on Organizational
Performance of the Mobile Telcommunications Firms In Kenya. United States
International University, Nairobi, Kenya.
69
Nasimi, M. H., Nasimi, S., Kasmaei, M. S., Kasmaei, H. S., Basirian, F., & Musapour,
H. . (2013). Knowledge management and competitive advantage for organizations.
Arabian Journal of Business and Management Review, 2(5), 56–64.
Ndung’u, C. W. (2012). Distribution strategies and competitive advantage in Kenya
Commercial Bank Limited. Univeristy of Nairobi,.
Noorani, B. (2014). Service Innovation and Competitive Advantage. European Journal
of Business and Innovation Research, 2(1), 12–38.
Odero, E. A. (2017). Effect of knowledge management on competitive advantage of audit
firms in Kenya: A case of Grant Thornton Kenya.
Odongo, F. O. (2015). Intellectual property rights as a strategic tool for achieving
competitive advantage by Safaricom Kenya limited. Univeristy of Nairobi.
Ogbo, A. I., Okechukwu, I., & Ukpere, W. I. (2012). Managing innovations in
telecommunications industry in Nigeria. African Journal of Business Management,
6(25), 7469–7477.
Oloko, M., Anene, E. B., Kiara, P. G., Kathambi, I., & Mutulu, J. (2014). Marketing
strategies for profitability : A case of Safaricom ltd in Kenya telecommunication
industry. International Journal of Scientific and Resesarch, 4(5), 1–5.
Oloo, J. (2018, May). Safaricom bags 3 awards for accelerating digital transformation in
Kenya. CIO East Africa. Retrieved from https://www.cio.co.ke/safaricom-bags-3-
awards-for-accelerating-digital-transformation-in-kenya/
Organisation for Economic Co-operation and Development (OECD). (2010). High
growth enterprises: What a government can do to make a difference. Paris:
organisation for economic co-operation and development.
Orodho, J. A. (2009). Elements of education and social science research methods.
Nairobi, Kenya: Masola publishers.
Porter, M. E. (1985). Competitive advantage: Creating and sustaining superior
perforemance. New York: Free Press.
Porter, M. E. (2008, January). The Five Competitive Forces That Shape Strategy.
Harvard Business Review.
70
Rahi, S. (2017). Research Design and Methods: A Systematic Review of Research
Paradigms, Sampling Issues and Instruments Development. International Journal
of Economics and Management Sciences, 6(2), 1–5.
Rahimli, A. (2012). Knowledge management and competitive advantage. Journal of
Information and Knowledge Management, 2(7), 37–43.
Reguia, C. (2014). Product Innovation and the Competitive Advantage. European
Scientific Journal, 1. Retrieved from
https://eujournal.org/index.php/esj/article/view/3634/3433
Sachitra, V., & Chong, S. C. (2018). Resources, capabilities and competitive advantage
of minor export crops farms in Sri Lanka: An empirical investigation.
Competitiveness Review, 28(5), 478–502. https://doi.org/10.1108/CR-01-2017-
0004
Safarcom. (2019). Safaricom Annual Reports. Retrieved October 10, 2019, from
https://www.safaricom.co.ke/investor-relation/financials/reports/annual-reports
Safaricom. (2018). Safaricom wins twelve awards in three award ceremonies. Retrieved
November 19, 2019, from https://www.safaricom.co.ke/about/media-
center/publications/press-release/release/493
Saunder, M., Lewis, P., & Thornhill, A. (2016). Research Methods for Business Sudents
(7th ed.). Edinburgh Gate: Pearson.
Shan, S., Luo, Y., Zhou, Y., & Wei, Y. (2019). Big data analysis adaptation and
enterprises’ competitive advantages: the perspective of dynamic capability and
resource-based theories. Technology Analysis and Strategic Management, 31(4),
406–420. https://doi.org/10.1080/09537325.2018.1516866
Srivastava, S., & Bhatnagar, A. (2012). Customer care services: a tool for competitive
advantage and customer satisfaction in mobile telecommunication services.
International Journal of Engineering and Management Research, 2(6), 37–39.
Sukati, I., Hamid, A. B. A., Baharun, R., Alifiah, M. N., & Anuar, M. A. (2012).
Competitive Advantage through Supply Chain Responsiveness and Supply Chain
Integration. International Journal of Business and Commerce, 1(7), 1–11.
Ungerman, O., Dedkova, J., & Gurinova, K. (2018). The Impact Of Marketing
71
Innovation On The Competitiveness Of Enterprises In The Context Of Industry 4.0.
Journal of Competitiveness, 10(2), 132–148.
Veerendrakumar, M. N., & Shivashankar, K. (2015). Exploratory study on achieving
sustainable competitive advantage through supply chain innovation for
strengthening organizational Performance. International Journal of Economics &
Management Sciences, 4(3). Retrieved from https://www.omicsonline.org/open-
access/exploratory-study-on-achieving-sustainable-competitive-advantage-
throughsupply-chain-innovation-for-strengthening-organizational-p-2162-6359-
1000236.php?aid=51687
Whalen, E., & Han, J. (2018). The innovative competitive advantage: a case study of two
pioneering companies, 6.
Wouters, J. (2001). Customer service as a competitive marketing instrument: An
investigation into the construction and measurement equipment supply chains. In
Annual IMP Conference.
Yamane, T. (1967). Statistics, An Introductory Analysis (2nd ed.). New York: Harper
and Row.
Yeboah, J., & Ewur, G. D. (2014). Quality customer service as a competitive advantage
in the telecommunication industry in the western region of Ghana. Journal of
Education and Practice, 5(5), 20–30.
72
APPENDICES
APPENDIX I: LETTER OF INTRODUCTION
Angela Awuor Okoth,
P.O Box 14634-00800,
Nairobi, Kenya.
Dear Sir/ Madam
RE: RELATIONSHIP BETWEEN STRATEGIC FACTORS AND THE
ATTAINMENT OF COMPETITIVE ADVANTAGE AT SAFARICOM PLC
I am a graduate student undertaking Masters in Business Administration at United States
International University.
I am currently undertaking a research on the relationship between strategic factors and
attainment of competitive advantage at Safaricom plc. This is a requirement in partial
fulfillment of my Masters in Business Administration degree. This is an academic
research and confidentiality shall be strictly adhered to. The information you provide will
at no instance be used for any other purpose other than for this research project. All
responses will be analysed in an aggregate manner and no individual identification of
responses will be compiled or reported.
Kindly therefore, complete the attached questionnaire with accurate information that will
be used entirely for this research.
Your assistance is highly valued. Thank you in advance.
Sincerely
Angela Awuor Okoth
73
APPENDIX II: QUESTIONNAIRE
RELATIONSHIP BETWEEN STRATEGIC FACTORS AND ATTAINMENT OF
COMPETITIVE ADVANTAGE AT SAFARICOM PLC
Strategic factors can be defined as those areas that a company needs to get right to enjoy
success with its key stakeholders. The purpose of this study is to find out the relationship
between strategic factors and the attainment of competitive advantage at Safaricom PLC.
Three variables are examined innovation, organizational resources and organizational
capabilities
Please note that your responses are confidential and that my reporting will not include
your individual name. Kindly respond to the following questions by ticking on the
appropriate box (√) or filling the answers in the blank spaces.
SECTION A: DEMOGRAPHIC INFORMATION
Instructions
Please fill in the information in the space provided. Kindly try your best to respond to all
items.
1. Gender : _________________________________
2. Age : _________________________________
3. Years Working at the Organization: _________________________________
4. Organizational Position: _________________
SECTION B: INNOVATION AND STRATEGIC FACTORS
Please tick (√) where appropriate or fill in the information in the space provided.
Kindly try your best to respond to all items
Product Innovation
Kindly indicate your level of agreement or disagreement related to your knowledge on
product innovation. Please indicate with a tick in the following table using the scale
provided.
KEY: Strongly Agree = 1; Agree = 2; Neutral = 3; Disagree = 4; Strongly Disagree = 5.
74
1 2 3 4 5
Product innovations results in the creation of improved and
new products that are easily differentiated at the market place.
Product innovation significantly contributes to the
improvement of product quality that satisfy the need of
distinct market segments.
Innovative products have improved functionality that make
them unique at the market place.
Innovative services have translated into fine and fast systems
that address the needs of specific market segments.
5. Process Innovation
Kindly indicate your level of agreement or disagreement related to your knowledge
on process innovation. Please indicate with a tick in the following table using the
scale provided.
KEY: Strongly Agree = 1; Agree = 2; Neutral = 3; Disagree = 4; Strongly Disagree
= 5.
1 2 3 4 5
Process innovation lead to cheap operational costs that in
turn result into the delivery of cheap product and services
to the target market segments.
75
Process innovation translates into enhanced efficiency of
service delivery, which increases customer satisfaction due
to satisfied consumer needs.
Financial innovations in the organizations have yielded
unique services that has increased consumer subscribers.
Process innovation has resulted into an enhanced supply
chain network that has helped reach new and dynamic
markets.
6. Market Innovation
Kindly indicate your level of agreement or disagreement related to your knowledge
on market innovation. Please indicate with a tick in the following table using the
scale provided.
KEY: Strongly Agree = 1; Agree = 2; Neutral = 3; Disagree = 4; Strongly Disagree
= 5.
1 2 3 4 5
Market innovation has helped the organization to reach
new market segments and attain new market positions by
uniquely accessing consumers.
Marketing innovation positively affects the sales of a
product or service by increasing their demand in the
market.
Market innovation is essential for helping the organization
to satisfying the needs of the consumers and therefore edge
out the competitors.
76
Marketing innovation is essential for helping the
organization to reach higher levels of perceived quality and
loyalty, thereby increasing the market share.
SECTION C: ORGANIZATIONAL RESOURCES AND STRATEGIC
FACTORS
7. Intellectual Property
Kindly indicate your level of agreement or disagreement related to your knowledge
on intellectual property. Please indicate with a tick in the following table using the
scale provided.
KEY: Strongly Agree = 1; Agree = 2; Neutral = 3; Disagree = 4; Strongly Disagree
= 5.
1 2 3 4 5
Intellectual capital provides a significant differentiator in the
marketplace when the competitors are unable to imitate a
firm’s competence and capabilities.
Intellectual capital helps the organization to improve its
processes, enhance its products and services that address the
needs of the consumers.
Intellectual property has helped the organization to attract
high numbers of customers and also increase the number of
subscribers by providing unique financial and
communication products and services.
Firms are increasingly relying on the management of
intellectual knowledge to add value to their knowledge
workers, interactions and products.
8. Organizational Culture
77
Kindly indicate your level of agreement or disagreement related to your knowledge on
organizational culture. Please indicate with a tick in the following table using the scale
provided.
KEY: Strongly Agree = 1; Agree = 2; Neutral = 3; Disagree = 4; Strongly Disagree = 5.
1 2 3 4 5
The development of affordable and unique products and
services relies on organizational culture that promote and
rewards innovation.
Organization cultures that support collaboration results in the
development of services that are differentiated by quality
delivery.
Sound organizational cultures eliminate uncertainty leading
to the improved productivity that targets respective markets
with affordable goods and services.
Organizational cultures influence the quality of processes
and procedures in firms, which determine the uniqueness and
relevance of their products and services.
9. Brand Equity
Kindly indicate your level of agreement or disagreement related to your knowledge on
brand equity. Please indicate with a tick in the following table using the scale provided.
KEY: Strongly Agree = 1; Agree = 2; Neutral = 3; Disagree = 4; Strongly Disagree = 5.
1 2 3 4 5
78
The development of strong brand equity helps organization to
create market niche through strong brand associations with the
consumers.
Strong brand equities increased the brand awareness within
the market place thereby edging out rival firms.
Organizations with strong brand equity can charge more on
their products and services as compared to their rivals.
With a strong brand equity, the company enjoys a significant
barrier to new entrants in the industry.
SECTION D: ORGANIZATIONAL CAPABILITIES STRATEGIC FACTORS
10. Customer Service
Kindly indicate your level of agreement or disagreement related to your knowledge on
customer service. Please indicate with a tick in the following table using the scale
provided.
KEY: Strongly Agree = 1; Agree = 2; Neutral = 3; Disagree = 4; Strongly Disagree = 5.
1 2 3 4 5
Quality customer service leads to enhanced service
performance and consumer preference due to increased
consumer satisfaction.
Customer services provides an effective market differentiator
that is reflected through increased market share.
Effective customer service leads to increased understanding
of consumers and therefore provide them with goods and
services that address their needs and wants
79
Quality customer service leads to quick and effective
responses to customers’ request and grievances, thereby
establishing confidence, trust and loyalty.
11. Knowledge Management
Kindly indicate your level of agreement or disagreement related to your views on
knowledge management. Please indicate with a tick in the following table using the scale
provided.
KEY: Strongly Agree = 1; Agree = 2; Neutral = 3; Disagree = 4; Strongly Disagree = 5.
1 2 3 4 5
Effective knowledge management is required for firms to
development of unique and competitive products for various
market segments.
Effective knowledge management is required for firms to
improve on their procedures and processes, which results in
the delivery of quality services to the consumers.
Knowledge management promotes productivity, which
improves the delivery of unique services to the consumers.
12. Distribution Network
Kindly indicate your level of agreement or disagreement related to your knowledge on
distribution networks. Please indicate with a tick in the following table using the scale
provided.
KEY: Strongly Agree = 1; Agree = 2; Neutral = 3; Disagree = 4; Strongly Disagree = 5.
80
1 2 3 4 5
For competitiveness organizations required well-structured
distribution networks to make products and services easily
available to their target markets.
Effective distribution network gives firms a competitive
edge through greater responsiveness that help them to meet
their consumer’s needs in a timely manner.
Proper distribution networks help firms to remain
competitive by making effective forecasts, and improve on
their inventory management.
SECTION E: COMPETITIVE ADVANTAGE MEASURES
Below are several measures of Competitive Advantage among organizations. Kindly
indicate the way Safaricom Kenya has performed on these measures due to the
identified strategic factors.
Use a 1-5 scale where Strongly Agree = 1; Agree = 2; Neutral = 3; Disagree = 4;
Strongly Disagree = 5
Variable 1 2 3 4 5
Continuous innovation in Safaricom does lead to cost
leadership in the industry
The possession of unique organizational resources does
lead to cost leadership in the industry
81
Safaricom’s organizational capability does lead to cost
leadership in the industry
The innovation of products and services in Safaricom leads
to the differentiation of its products and services.
Safaricom’s possession of unique organizational resources
leads to the differentiation of its products and services
Safaricom’s organizational capabilities leads to the
differentiation of its products and services.
Safaricom’s Innovativeness allows for it to market its
products and services in a focused market
Safaricom’s organizational resources allows for it to target
its products and services in a focused market
Safaricom’s organizational capabilities allows for it to
market its products and services in a focused market
The use of innovation in the production of Safaricom goods
and services has led to its profitability in the industry
The possession of unique organizational resources has led to
Safaricom’s profitability in the industry
Safaricom’s use of its organizational capabilities has led to
its profitability in the industry
The use of innovation at Safaricom in the production of
goods and services has increased its market share in the
industry
Safaricom’s organizational resources has increased its
market share in the industry
Safaricom’s organizational capabilities has increased its
market share in the industry
The use of innovation at Safaricom’s in the production of
goods and services has improved its reputation in the
industry
The use of Safaricom organizational resources in the
production of its products and services has improved its
reputation in the industry
82
The use of Safaricom organizational capabilities in the
production of its products and services has improved its
reputation in the industry
83
APPENDIX III: USIU LETTER
84
APPENDIX IV: NACOSTI PERMIT
NATIONAL COMMISSION FOR
SCIENCE,TECHNOLOGY & INNOVATION
Ref No: 776310 Date of Issue: 06/February/2020
RESEARCH LICENSE
This is to Certify that Miss.. Angela Awuor Okoth of United States International University Africa, has been licensed to conduct
research in Nairobi on the topic: RELATIONSHIP BETWEEN STRATEGIC FACTORS AND ATTAINMENT OF
COMPETTIVE ADVANTAGE AT SAFARICOM PLC. KENYA for the period ending : 06/February/2021.
License No: NACOSTI/P/20/3698
776310
Applicant Identification Number Director General
NATIONAL COMMISSION FOR
SCIENCE,TECHNOLOGY &
INNOVATION
Verification QR Code
NOTE: This is a computer generated License. To verify the authenticity of this document,
Scan the QR Code using QR scanner application.
