Safaricom Ltd. SWOT Analysis Author’s name Institution Abstract This paper expounds on results from a SWOT analysis of Safaricom Ltd, a leading mobile network company in Kenya. This basically describes a research conducted to determine the company’s achievements, limitations, opportunities and challenges. Brief information on the history, management and major undertakings of the company since it was started are among issues outlined in this paper in a bid to enhance better understanding of the company’s profile and the analysis of its performance.
This paper solely focuses on the analysis that reveals what makes the company tick, what weaknesses it exhibits, as well as its opportunities and possible threats. Introduction Safaricom Ltd. Is the largest and indisputably the most profitable mobile phone services provider in Kenya and the entire East African region. It was formed in 1997 under full ownership of Telkom Kenya. It was among the first companies to venture into the mobile telephony industry in Kenya, a technological advancement that was being gradually embraced by locals.
In 2000, the largest telecommunications company in the world, Vodafone, acquired a massive 40% ownership stake of this young organization, and management was subsequently taken up by these United Kingdom’s industry giants. The company has since grown steadily and immensely and today it boasts a subscriber base of over 10 million, over 10000 employees and an astonishing turnover of over 600USD per annum. In a record time of less than 15 years of operations, Safaricom Ltd. has risen to a domineering position in the mobile services industry and notably the most profitable company in East Africa.
This trend has been majorly attributed to the company’s creativity and reliable service provision throughout the years. (Adhengo, 2011) Safaricom Ltd. SWOT Analysis Strengths Safaricom has emerged as a leader in its field of operations. The company’s mobile money transfer service, M-PESA, is among its most innovative and unique services. This reliable system has empowered many rural residents by making accessible, money that would otherwise be inaccessible due to shortage in banking centers. (Reddick, 2010).
The service has proved to be the perfect consolidation between mobile phones and banks for different business strategies, considering the veritable convenience of being able to manage a bank account, pay bills and engage in innumerable financial transactions at the touch of a button. (Zavoral, 2011) The company has consistently made remarkable growth at a rate of more than 20% in a relatively short time span of only 14 years, denoting its stability. The company made an unmatchable profit of 370 million USD in 2007 making it the biggest gainer in the East African region.
The company has maintained a massive subscriber base and built its reputation by providing reliable services consistently. It has also become popular among its clients by being actively involved in corporate social responsibility projects that seek to empower the populace both socially and economically especially through sports and games. Its corporate colour, green, which is associated with a season of abundance, coupled with its involvement in environmental conservation has been pivotal in luring clients. Githinji, 2010) Weaknesses. Although the company won many clients during its debut years of operation due to its pricing strategy of per second billing, when its only rival by then, Kencell, embraced per minute billing, the company’s call rates are currently the highest among mobile services companies in Kenya. This has made it lose some clients to other companies, for instance, Yu which has targeted the low-income segment by introducing low cost services. (Githinji, 2010) Opportunities
With the advent of the fiber optic cable and the increased need for internet connection in Kenya, the company stands to gain through provision of internet services. Other opportunities lie in expansion of the company so as to provide services to other countries apart from Kenya. The Micro-finance industry is also another potential goldmine for the company considering its reliable mobile money transfer system, which could be upgraded such as to encompass a complete banking system where subscribers can take loans and repay at an interest. Reddick, 2010) Threats With increasing competition in the mobile telephony industry, the company might lose a reasonable percentage of its subscriber base to its competitors, leading to a decrease in the profit margins. The company also risks running out of creativity, considering the appeal to novelty that a typical client would have, and their desire to enjoy new products and services. SWOT Summary A critical evaluation denotes the company’s limitations as being inferior to its recognizable strengths and lucrative opportunities.
The company seems to have laid a firm and reasonably unshakeable foundation that will propel it to greater heights for a long time. References Adhengo, B. (2011). Creativity in Kenya. North Carolina: Lulu. Githinji, P. (2010). Safaricom and the making of a Kenyan brand. The Standard Online: Standard Media Group. Reddick, C. (2010). Comparative E-Government. New York: Springer Zavoral, F. (2010). Networked Digital Technologies, Part 1. New York: Springer