First Mover Strategy and Performance of Selected Telecommunication Application Service Firms in Kenya
Ngugi, Rahab Wanjiku
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Dynamics in the telecommunication sector are constantly changing hence telecommunication application service firms are experiencing declining performance. Rapid growth pace, threats from new entrants, adoption of new products by customers has increased competition leading to loss of customers, firm reputation and declining profitability. Telecommunication application service need to adopt strategies that can respond to the changing environment. This study sought to investigate the effect of first mover strategy on performance of selected telecommunication application service firms in Kenya. More specifically, the study assessed the effect of barrier to entry strategy, quality improvement strategy, mass market dominance strategy and niche market penetration strategy on performance of selected telecommunication application service firms in Kenya. In addition, the study investigated the effect of the mediator variable, entrepreneurial orientation and the moderator variable, information technology capability on first mover strategy and the performance of telecommunication application service firms. The underpinning theories were goal setting theory, game theory, dynamic capability theory and entrepreneurial orientation theory. The epistemological position was positivism and the research design adopted was descriptive and explanatory. The population targeted was 21 selected telecommunication application service firms. The unit of analysis was the selected telecommunication firms while the unit of observation was the heads of functional areas of marketing, finance, operations and strategy and the managing director in each of the telecommunication application service firms. Both primary and secondary data was collected. Open and closed-ended questionnaire was used to collect primary data while secondary data was collected from Communications Authority. A pilot study was conducted to determine the reliability of the research instrument. The study attained the required coefficient and gave an overall coefficient of 0.9. To ensure content and face validity, the instrument was subjected to an expert opinion. Descriptive and inferential statistics were used to analyze quantitative data. Descriptive analysis was done using mean scores, frequencies, standard deviations and percentages. While inferential statistics was carried out using correlation and multiple regression. The relationship between the independent, moderating, mediating and dependent variables were assessed using multiple linear regression. Hypotheses testing was conducted at 5% level of significance using P-values to assess significance. Content analysis was used to analyze qualitative data in order to establish meaning, interpret and draw conclusions. According to the study’s findings, barrier to entry strategy, quality improvement strategy and niche market penetration strategy all have a positive and significant effect on the performance of selected telecommunication application service firms in Kenya, while mass market dominance strategy has an insignificant effect on the performance of selected telecommunication application service firms. Further, the study found that first mover strategy and performance of telecommunication application service firms in Kenya is not moderated by information technology capability. However, entrepreneurial orientation mediates the relationship. This study concludes that niche market penetration strategy has the highest significant effect on performance of selected telecommunication application service firms. Hence the study recommends telecommunication application service firms should adopt activities related to relationship management in order to serve the needs of consumers and thus improve performance.