Competitive strategies, market orientation and performance of Telkom Kenya Limited Company

Abstract

The performance of the telecommunication companies has been soaring over the years as it’s evident in recent report from the Communication Authority. However, Telkom Limited has been reporting a slower growth than its competitors with limited margins of rising market share that raises eyebrows, yet they are the oldest broom in the telecommunications industry in Kenya. The general purpose of this study is therefore to determine the moderating effect of Market Orientation on the relationship between competitive strategies and organizational performance in Telkom Kenya, Nairobi County. The specific objectives of the study are to; establish the effect of a market focus strategy, cost leadership Strategy, Differentiation Strategy and strategic alliance on organizational performance and lastly establish the moderating effect of market orientation on competitive strategies and organizational performance. The study was guided by Market-based view theory as the main theory and resource-based view theory and the dynamic capabilities as supplementary theory. The study was guided by explanatory research design. The target population comprised 300 employees of Telkom Kenya Limited in Nairobi County. A final sample of 171 respondents was obtained using simple random sampling method. The study used both descriptive statistics and inferential to analyze the data. The study employed Hierarchical regression model. The regression results indicated that market-focus strategy (β = 0.173, ρ <.05), cost leadership Strategy (β = 0.274, ρ <.05), Differentiation Strategy (β = 0.258, ρ <.05), strategic alliance (β = 0.232, ρ <.05) had a positive and significant relationship with organization performance.The results further confirmed that market orientation had a moderating effect on market focus strategy (β = -0.778, ρ <.05), low cost strategy (β = -0.0581, ρ <.05), differentiation strategy (β = -0.068, ρ <.05), and on strategic alliance (β = -0.088, ρ <.05) and organization performance. The study concluded that the competitive strategies are key determinants of Telkom Kenya Limited performance and that market orientation moderates that relationship. The study's conclusions have implications for managers and regulators. The study recommends that Telecommunication companies in Kenya should evaluate their strategy to differentiate themselves from other players in the service industry market with effective differentiation strategies in order to improve their current strategies while aiming to improve organizational performance and competitive advantage. Future research should investigate the moderating role of market orientation on the relationship between competitive strategies and organization performance of other competitors as well as other or firms in other sectors.