Competitive Positioning Through Strategic Alliances: A Case of Safaricom Limited

A Research Project Report Submitted to the Chandaria School of Business in Partial Fulfillment of the Requirement of the Degree of Masters in Business Administration (MBA)The purpose of this study was to establish if Safaricom Ltd has attained a competitive positioning through the various strategic alliances it has. This study was developed through three objectives namely; to establish how competitive positioning at Safaricom Ltd has been achieved through the various types of strategic alliances it has; to establish the benefits of strategic alliances in Safaricom Ltd; to establish the of challenges of strategic alliances in Safaricom Ltd. There are different types of strategic alliances and some examples are licensing, joint ventures, cooperative agreements, and franchises. From the scholarly works, the benefits of strategic alliances were identified as acquisition of resources, shared risks, shared knowledge and expertise, organizational learning, and entry into new markets and business growth. Reviewed literature on the challenges faced by strategic alliances included poor strategy, role ambiguity, lack of top management commitment, lack of trust, and failure to learn and understand the differences in culture. The research methodology that was used to carry out the study is the descriptive research method. It was focused on middle and upper level management for Safaricom Limited. From the population a sample size was drawn based on the stratified random sampling method. Data collection was carried out by administering questionnaires made up of structured as well as open ended questions. This data was analyzed through the descriptive statistics while using Microsoft Excel and SPSSS as the analysis tools. The data was presented using tables and graphs. On analysis of the objectives it was revealed that when looking at competitive positioning, most respondents highly supported the idea that firms enter into strategic alliances to become more competitive on a global scale and that time was crucial in determining when a firm should enter into a strategic alliance. It was also highly agreed that a high competitive positioning of a firm will lead to high premium prices. Respondents also agreed that a firm can enhance its competitive positioning by forming alliances with its competitors and also that, firms enter into strategic alliances so as to leverage knowledge and resources. On analysis of the benefits received by Safaricom through strategic alliance most respondents said strategic alliances can be used as a means to diversify into new markets and the higher the level of resource complementarity in the alliance, the higher the probability of success. The findings also reveal that firms determine how alliances will help in developing new products, firms are also able to grow through strategic alliances. Strategic alliance was also found to help firms to gain competitive advantage and firms were able to learn through strategic alliances. While looking at challenges received through strategic alliance, poor strategy was found to be the main cause of failure in strategic alliances, lack of commitment from top management results in failure of strategic alliances, and different management styles lead to failure of strategic alliances. In conclusion, the study has revealed that companies enter in to strategic alliances to become more competitive especially in the global scene and that time also played a major role in determining when a firm should enter in to a strategic alliance. This study has shown that the main benefits of strategic alliances were to diversify into new market opportunities, and to increase resource complementarity within the alliances. According to the study, the main challenges to strategic alliances were poor strategy and cultural differences that led to different management styles. The study recommended that firms should enter into strategic alliances so as to enter into a new market. The study further recommends that firms should thoroughly screen their potential alliance partners before entering into an alliance