Safaricom: The Mobile Money Pioneer in Kenya - Essay Sample

Introduction

Safaricom came into existence in 1997, and since then, it has managed to register a progressive growth in the mobile industry in Kenya (Ndisya, 2016). For the last seven years, the Kenyan mobile money industry has experienced tremendous growth, and this has been attributed to by the growing innovation in the mobile industry as well as the increasing population. When Safaricom entered in the communication and mobile transfer industry, it has led to the industry growing with a large margin. Safaricom has brought about a lot of convenience to the people by transforming millions of lives through reliable money transfer platform, eased systems of communication, sending and receiving funds both locally and internationally, and easy access to mobile loans. The company enjoys 64.5% of the total market share in Kenya, with over 77% of voice traffic and 72.6% of internet subscribers, making it the dominant player in the mobile industry. Besides, Safaricom also engages in social activities like promotion of talent and education through Dimba na Safaricom and The Safaricom Foundation respectively, and even in economic empowerment of various groups in the society.

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Safaricom is the dominant player in Kenya's fast-growing communication market since it is a leading brand in the country. The company has effective management and leadership, supplemented by high reliability in technology, and that combination is the primary reason for its thriving. It has also received support from the government that has provided a conducing environment for its operation by offering conducive market conditions. Kenya has a very conducive legal framework for business growth, and the key opportunities include the growing population of the country, which results in the high demand for services. There is also a high demand for internet connection in the country, which makes Safaricom have the upper hand. Another effective approach by Safaricom is that it has intensively invested in technology which has enabled it to grow and expand since technology offers diverse avenues for the same. The company also enjoys economies of scale since it has financial muscles and a good capital base.

The Competitor Environment and Safaricom Position

The voice call service provision of the communication industry is where there is a significant amount of competition. Other areas of competition include mobile money transfer and internet access services, though with little magnitude, with rare cases of access to soft loans and airtime. Safaricom Limited Company faces competition from Equitel Limited Company Airtel Limited Company and Airtel Kenya in area of voice calls. However, Safaricom Limited Company is dominant in the market; hence the competition is weak. When it comes to internet access, Safaricom Limited Company currently faces competition from Zuku Limited Company, Airtel Kenya, and Jamii Telecommunication Limited (Faiba Limited).

In the field of mobile money transfer services, Safaricom faces competition majorly from banks like the Kenya Commercial Bank, National Bank of Kenya, Equity Bank of Kenya, and Cooperative Bank of Kenya, among others. Transfer of money experiences stiff competition, but Safaricom has managed to dominate the market through MPesa service, which is very accessible and convenient. To stay ahead of its competitors, Safaricom has done a lot in terms of innovation, consumer education, and aggressive promotion.

Safaricom's CEO, Robert Collymore's Strategic Leadership

Bob Robert Collymore was the CEO Safaricom from 2010 until his death in 2019. He is known to have been very successful in leading the company through an intensive planning approach. Collymore used strategic leadership to make the company successful, whereby there were clear objectives set for the company to achieve, and with a plan to achieve them. Safaricom is doing a lot of market planning both in long and short terms to ensure they get the right information. Collymore dispensed his leadership mainly through a democratic approach where there is an intensive involvement between the middle-level management and the top management in making policies and change plans.

Bob Collymore management also invested in the concept of investment in innovation and talent maturing. Safaricom is the most innovative company in Kenya today. To ensure relevance in the company, there is a lot of investment in effective leadership, with high investments in research and development department which provide the company with a lot of changes occurring in the market industry.

Next Move and Recommendations

Effective innovation and research have been the primary driver of the company. The company should now think of a next move, such as entry into low-cost services and money market. Safaricom services such as internet and voice calls are some of the most expensive compared to its competitors such as Airtel, Faiba, Telkom, and Zuku companies. To experience further growth, Safaricom should also consider venturing into the money market industry to have convenient services. Another area that Safaricom needs to improve is to be uniform in their service provision. For example, while it is currently providing 4G+ internet services, some areas still do not have 3G internet service. Lastly, Safaricom needs to lower the costs of transaction in its mobile money transfer platform Mpesa to increase the number of users.

Reference

Ndisya, S. M. (2016). Influence of transformational leadership on employee Performance. A Case Study of Safaricom Limited (Doctoral dissertation, COHRED, JKUAT). Retrieved from https://pdfs.semanticscholar.org/f845/67756cc375e03f129d7fc694439eb76c83e7.pdf