DRIVERS OF STRATEGIC ALLIANCES GROWTH IN THE KENYA TELECOMMUNICATION INDUSTRY: A CASE OF SAFARICOM LIMITED
Doreen Gatobu - Masters in Business Administration (Strategic Management), Kenyatta University, Kenya
Chrispen Maende - Kenyatta University, Kenya
ABSTRACT
Strategic alliances are becoming an important form of business activity in many industries, particularly in view of the realization that companies are competing on a global field. The purpose of the study was to establish the Key drivers affecting the growth of strategic alliances in telecommunication industry with reference to Safaricom Ltd. The objectives of the study included: to establish the influence of cost sharing on the growth of the strategic alliances in telecommunication industry; to assess the influence of risk sharing influence on the growth of strategic alliance in telecommunication industry and to determine the influence of skill sharing on the growth of alliances in telecommunication industry. This study adopted a descriptive research design carried out as a case study of Safaricom Limited. The target population of this study comprised of 337 management employee working at Safaricom Limited and their alliances partners from which a sample of 125 respondents was picked using stratified random sampling. Both primary and secondary data was employed in the study. The researcher used a questionnaire as the primary data collection tools and was administered using both email and a ‘drop and pick later’ method to the sampled respondents. A pilot study was undertaken on at least (10) respondents to pre-test the data collection instrument for accuracy, completeness and relevancy for the data to be collected. The quantitative data in this research was analyzed by descriptive statistics using appropriate statistical tools. The data collected was analyzed using of Microsoft Excel 2010 and Statistical Package for Social Sciences (SPSS) Version 21. In addition, the study conducted a multiple regression analysis to establish the relationship between the variables.The study found out that to a great extent cost sharing affects the growth of strategic alliances in the telecommunication industry and that earning economy of scale in R & D, pursuing R&D cost reduction, avoidance of wasteful duplication, sharing fixed cost and Sharing R&D resources were the aspects of cost sharing that influence the growth of strategic alliances in the telecommunication industry, reducing competition, reducing uncertainty in cooperative R&D, buffering threats from external competitors and risk spreading among participants were the aspects of risk sharing that influence the growth of strategic alliances in the telecommunication industry and Information exchange, technology transfer, researcher training, management training and access to complementary knowledge were the aspects of skill sharing that influence greatly the growth of strategic alliances in the telecommunication industry. The study concludes that strategic decisions are driven by the evaluations of present and future benefits that a firm stands to gain, strategic alliances are trading partnerships that enhance the effectiveness of the participating Safaricom alliances competitive strategies by providing technology, skills and products exchanges and companies could improve growth of the strategic partnership between companies and other players in the mobile banking sector through effective utilization of existing market conditions to promote strategic alliance formation such as removing of stringent legal rules , designing of good model s of partnership formulation of that facilitated integration of the mobile phone services and money transfer and execution strategies that enabled the company to get a critical mass market. The study recommends that the Safaricom limited should include competitive intelligence in its strategic alliance practices, Safaricom limited could look into partnering with non-aligned businesses with a view to diversification in order to spread risks and companies need to adopt strategic alliances as a policy to strengthen their competitiveness and increase their efficiencies.
