Assessment of cost Leadership Strategy on Enhancing Competitive Advantage A survey of Kenya’s Telecommunication Industry

Abstract

Tough economic times, stiff competition, globalization among other macroeconomic factors have led companies to adopt strategies that would enable them to remain competitive in whichever industry they are operating in. One of these strategies that is currently gaining currency in Kenya and globally among many large organizations is the Cost leadership strategy. Companies are adopting stringent measures to curb costs and lower prices while at the same time striving to provide value to customers so as to enhance their competitiveness in the market. The study focused on the telecommunications industry in Kenya, an industry that has seen brutal price wars in the last few years between the main players which are Safaricom, Airtel, Telecom's Orange and Essar's Yu. The study intended to establish how variables such as low pricing, economies of scale, controlled costs and resources contributed to the enhancement of competitive advantage. The study adopted the descriptive research design that focused on the relationship between strategies the organizations are employing to win more customers and the resultant competitiveness they have achieved so far. Stratified random sampling technique was used to select sample population. Eighty people were selected from a population of four hundred and three employees of industry players Safaricom, Bharti Airtel, Orange and Yu mobile. The respondents were selected from strategic management, sales and marketing management and representatives and finance and human resources management. Data was collected from both primary and secondary sources. Primary data was collected using personal interview and questionnaires developed by the researcher and administered with the help of trained research assistants while secondary data was collected through review of relevant literature. Data was analyzed using Microsoft excel, descriptive analysis and result presented in pie charts, graphs and tables. The results will be presented to management of these organizations for considerations on how to enhance their competitive advantage in the industry.