Factors Affecting Entry of Telecommunication Companies in Kenya: A Case of Huawei

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)The purpose of this study was to analyze factors affecting entry of telecommunication industry in Kenya: a case of Huawei. The study was guided by the following research objectives; to establish the impact of marketing mix on entry Strategies in the telecommunication sector, to analyze the effects of macroeconomic factors on the performance of firms in the telecommunication industry in Kenya and to analyze the effect of microeconomic factors on the performance of firms in the telecommunication industry in Kenya. A descriptive research design and qualitative and quantitative data was used to analyze descriptive statistics. The total population of this study comprised of 88 managers in Huawei Outlets in Nairobi and a total census was done. Data was collected using well-structured questionnaire. The data obtained was analyzed using statistical Package for Social Sciences (SPSS) and excel. Percentages, means, standard deviations, frequencies was used to present results. The findings from the first objective revealed that Huawei has used product differentiation in Kenya, and the use of point of purchase has created a link between consumer sales promotion and trade sales promotion. It was also revealed that Huawei has lowered prices and increased promotions when faced with threat from competitors, and Huawei has ensured that customers have ease of access to products. The study also revealed that at Huawei, retail location is considered to be an important element of the retail mix and prices have been changed based on the prices of competitors. The findings also revealed that Huawei products are perceived of high quality and affordable. From the analysis, the findings from the second objective revealed that social and cultural issues have affected Huawei performance. It was also revealed that while economic factors such as inflation and availability of disposable income influence performance of the company. It was also established that suppliers, buyers, product substitutes and increase in competition among other companies affects Huawei’s performance and heavy taxation on mobile operators has led to unnecessary excessive cost of services for consumers. Huawei has used low price strategy to price its products while existence of anti-competitive practices has affected its competition. iv The last objective revealed that Huawei has participated in trade associations and use of marketing intelligence has helped the firm achieve a competitive advantage. It was also revealed that the company motivates its employees and has used management practices to boost employee morale. It was also noted that Huawei practiced best management practice and networking has improved Huawei’s performance. It was also noted that the firm has used market intelligent to develop market and get more knowledge on external environment. The study concluded that in the telecommunication industry, there is a wide variety of consumers and therefore adoption of differentiation is vital. In addition, there is a rampant competition between the various companies, and price matters a lot, therefore, Huawei has lowered prices and increased promotions when faced with threat from competitor. It was also concluded that social and cultural environment in the market affects Huawei performance. Similarly, economic factors such as inflation and availability of disposable income has influenced the performance of the company. Lastly it was concluded that to market its products the company has participated in trade associations and adopted the use of marketing intelligence to achieve a competitive advantage. The company also knows the value of its employees and thus undertake motivation and boost employee morale. It was recommended that Huawei should continue utilizing product differentiation in Kenya so as to serve the various classes of consumers. Huawei also need to establish reasonable prices to avoid lowering prices when faced with threat from competitors. Huawei also need to ensure customers have increased access to products. Secondly it was recommended that Huawei needs to undertake an effective situation analysis and create a good relationship with suppliers and buyers, as well as invest a lot in research and development in order to compete effectively in the dynamic market. Lastly, Huawei needs to continue its participation in trade associations and exhibition to boost its sales and market growth. The firm should also increase that use of marketing intelligence to remain competitive in the market. There should be an increased motivation of employees to guarantee continuous efficiency. It was also recommended that further studies should be done in other companies in the sector in order to generalize the findings