GROUP

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MEMBERS:

1. PATEL KATHAN M- 650689

2. Ochieng cylia Atieno - 647530
3. Ruchi nileshkumar patel - 651398
4. Sharon kemunto omwenga 646703
5. A.P Atieno Ngala-650107
6. Jerry Bogonko Orina - 649879
7. Okello Brian Macharia -652166

COURSE CODE – BUS 4080 (B)

COURSE NAME- BUSINESS PROCESS MANAGEMENT

COURSE INSTRUCTORS – JANE WERE

TASK – A CASE STUDY ON SAFARICOM LTD

SEMESTER – FALL 2018

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Table of Contents

1.0 INTRODUCTION 3
1.1 MISSION 5
1.2 VISION 5

2.0 HISTORICAL BACKGROUND OF SAFARICOM 6

3.0 GOVERNANCE AND ORGANIZATION STRUCTURE OF SAFARICOM 9

3.1 SAFARICOM SENIOR MANAGEMENT 11

4.0 MICHAEL PORTER’S ANALYSIS 15

4.1 COMPETITIVE RIVALRY. 15

4.2 SUPPLIER POWER. 16
4.3 BUYER POWER. 16
4.4 THREAT OF SUBSTITUTION. 16
4.5 THREAT OF NEW ENTRY. 16
4.6 SAFARICOM’S MICHAEL PORTERS FIVE FORCE ANALYSIS INCLUDES: 17

5.0 THE INDUSTRY SAFARICOM IS OPERATING IN. 22

5.1 SERVICE INDUSTRY 22
5.2 ENVIRONMENTAL FORCES 22

6.0 THE PRODUCTS AND SERVICES PROVIDED BY SAFARICOM LTD. 23

7.0 MARKET FOR THE COMPANY 26

8.0 TYPE OF TECHNOLOGY USED BY SAFARICOM 28

8.1 FLASHBACK SERVICE 28

8.2 ELECTRONIC CASH SERVICE 28
8.3 KIPOKEZI SERVICE 29

9.0 THE PROCESS OF HOW SAFARICOM OPERATES 30

9.1 SAFARICOM BUSINESS MODEL: 30

10.0 CHALLENGES AND SOLUTIONS. 33

11.0 CONCLUSION 35

12.0 RECOMMENDATIONS 36

13. 0 BIBLIOGRAPHY 37

1.0 INTRODUCTION

Safaricom Public Limited Company, is a leading mobile network operator in Kenya. It was formed
in 1997 as a fully owned subsidiary of Telkom Kenya. In May 2000, Vodafone Group Plc of the
United Kingdom acquired a 40% stake and management responsibility for the company. On 28th
February 2018, Safaricom changed its name in compliance with section 53 of the Companies Act,
2015. The company will now be Safaricom PLC instead of Safaricom Limited with effect from
January 31, 2018. As of December 2, 2016, Bob Collymore was the CEO; he succeeded Michael
Joseph on November 1, 2010, after Joseph's ten years as Safaricom CEO.

Safaricom is one of a small group of about 400 companies across Africa whose annual revenues are
more than $1 billion. Many of these companies are Pan-African in their operations and are active in
increasingly diverse sectors.

They invest a unique way of doing business through our Purpose; to ‘Transform Lives’. They seek
to create opportunities for Kenyans to be a part of our growth story by empowering them with the
right tools for economic growth. The “Simu ya Jamii” innovation allowed Kenyans to earn money
from operating small, mobile pay phones.

Safaricom’s goal is to transform lives through providing unmatched products and services that meet
the needs of Kenyans.

They achieve their Transforming Lives vision through a number of channels, but the origin of our
most impactful transformation stories is the base station. They now have over 4,000 towers
connecting Kenyans from Turbo to Turkana with each one of these base stations having its own
unique story to tell.

Safaricom’s services include mobile and fixed voice, SMS, data, internet and M-PESA, a mobile
phone-based money transfer service. The vast majority of Safaricom’s services (97 percent) are
prepaid by the customer.

This term paper will focus on the historical background of Safaricom, the governance and the
organizational structure, the industry the firm operates in, the products and services offered by
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Safaricom, the market in which the company operates in, technology used by the company, the
strengths and weaknesses of the firm, the challenges faced by the company and how it overcomes
those challenges. Basically the term paper will tell us about Safaricom and help us understand how
it does its business and remains competitive in the harsh environment of the business world, and
why it is successful.

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1.1 MISSION

“Our mission is to build communities and transform lives.”

“We have invested heavily in education, health, economic empowerment, environment, disaster
and emergency interventions.”
1.2 VISION

“A thriving and prosperous Kenya.”

Safaricom is dedicated to transforming the lives of our customers, communities and colleagues.
We pride ourselves in our track record of the same, and know that this is just the beginning: we
will continue to work collaboratively to impact positively the lives across the country and
beyond.

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2.0 HISTORICAL BACKGROUND OF SAFARICOM
Safaricom Limited was incorporated on 3 April 1997 under the Companies Act as a private limited
Liability Company as a fully owned subsidiary of Telkom Kenya. It was based on an analogue
ETACS network and was upgraded to GSM in 1996 (license awarded in 1999). By virtue of the
60% shareholding held by the Government of Kenya (GoK), Safaricom was a state corporation
within the meaning of the State Corporations Act (Chapter 446) Laws of Kenya, which defines a
state corporation to include a company incorporated under the Companies Act which is owned or
controlled by the Government or a state corporation. In May 2000, Vodafone group plc, the world’s
largest Telecommunication company acquired a 40% stake and management responsibility for the
company.

It was converted into a public company with limited liability on 16 May 2002. Until 20 December
2007, the GoK shares were held by Telkom Kenya Limited (“TKL”), which was a state corporation
under the Act. In accordance with the Government of Kenya’s policy of divesting its ownership in
public enterprises, the Government of Kenya through the Treasury Department, on 28 March 2008
made available to the public 10,000,000,000 of the existing ordinary shares of par value Ksh 0.05
each, of the Company. This represents 25% of the total issued share capital of Safaricom from the
Government of Kenya’s shareholding in Safaricom Limited. Therefore, GoK ceased to have a
controlling interest in Safaricom under the State Corporations Act and therefore the provisions of
the State Corporations Act no longer apply to it.

Safaricom has grown through a variety of strategies, including acquisitions. In 2008, Safaricom
purchased a majority stake in One Communications Ltd, in order to gain access to its data services.
The company has also made several other small acquisitions to enhance its services and market
share.

Safaricom’s aim is to remain the leading Mobile Network Operator in Kenya. With the growing
subscriber base, the company has employed over 1000 employees and opened 10 retail shops in
Nairobi, Mombasa, Nakuru and Kisumu. The firm has a wide dealer network of over 152 dealers
countrywide, (www.safaricom.co.ke) Safaricom is partly owned by the Government of Kenya 35%,
Vodafone 40% and 25% is owned by the shareholders. It is worth forty billion Kenyan shillings in
shares. This is approximately four hundred million Euros. Its market capitalization is worth two
hundred and twenty-two billion Kenyan shillings as at 31st of March 2010. Safaricom is listed in

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the Nairobi stock exchange market with a rather slow but steady share price ranging from 4-6
Kenyan shillings. This share price is interestingly low as it has been trading in the stock exchange
market for more than 2 years having started at 5 shillings during its Initial Public Offering (IPO)
way back in 28th March 2008. Some reports indicate the Safaricom IPO was oversubscribed by
532%.

Most of Safaricom’s senior management team has vast experience in telecommunications.

Leading the team is Robert (Bob) Collymore, who took on the responsibilities of CEO in

November of 2010. Bob Collymore replaced Michael Joseph, who had held the position since

2000. The transition was amicable as Michael Joseph was heading to retirement and wanted to

wait until “a successor is in place”. Collymore is also the Executive Director on Safaricom’s

board of directors, leading with twenty-five years of commercial work experience in the

telecommunications sector. Collymore is supported by CFO John Tombleson, who joined the

company in November 2011 and has a strong background in financing growth. Prior to

Tombleson’s arrival at Safaricom, he held executive positions at Vodafone Qatar, which

captured 48% market share within two years of its founding.

As the largest mobile provider in Kenya, Safaricom has touched the lives of Kenyans throughout

the country, with products and services designed to empower people. Safaricom enjoys a 64.5%

market share, 77.5% of voice traffic, and 72.6% of mobile data/internet subscribers. Safaricom

facilitates community involvement through various organizations such as the M-PESA

foundation, a charitable trust that seeks to advocate programs that improve health, environmental

conservation and education for the financial and social benefit of Kenyans, and the Safaricom

Foundation, whose mission is to partner with the community to tackle environmental, economic,

and social issues to bring about enduring and progressive change. Safaricom also serves society
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by sponsoring athletic events through Safaricom Sevens, the biggest rugby event in Kenya, and

by sponsoring the music festival Niko na Safaricom Live, an event featuring local music talent

and fostering national pride.

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3.0 GOVERNANCE AND ORGANIZATION STRUCTURE OF SAFARICOM
Safaricom Board of Directors

Nicholas Nganga – Chairman and non-executive director

Nicholas Nganga joined Safaricom’s board of directors in May 2004 and was elected the

Chairman January 2007. Mr. Nganga also holds positions at G4S Security (chairman) and the

University of Nairobi (Vice-chair of the Council).

Michael Joseph – Non-Executive Director

Michael Joseph was the previous CEO of Safaricom and has extensive international experience

in the implementation and operation of large wireless and wire line networks. Mr. Joseph was

elected to the board in September 2008, and has been a recipient of the CEO of the Year award.

Robert Collymore – Executive Director and chief executive officer

Bob Collymore is the current CEO of Safaricom and has more than 25 years of commercial

experience working in the telecommunications sector. Collymore is also a trustee for M-PESA in

both Kenya and Tanzania.

Esther koimett – Alternate to Henry Rotich

Esther Koimett joined the Board of Safaricom on 24 May 2005. She previously served on the Board
between 11 April, 2001 and 5 September, 2002. She holds Bachelor of Commerce and MBA
degrees from the University of Nairobi and is currently the Investment Secretary in the Treasury.
Esther has also served as Permanent Secretary in the Ministry of Tourism and Information and
Managing Director, Kenya Post Office Savings Bank.

Kathrynne Maundy – Company secretary

Kathrynne is a Senior Manager in the Company Secretarial and Registration Services Department at
Deloitte Limited. She has over 11 years of consulting experience guiding local and multinational
companies and their boards in discharging their statutory and Corporate Governance mandate. She
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has worked in the East African Countries of Kenya, Uganda and Tanzania, and is therefore well
versed with the applicable corporate laws and other statutory regulations in these jurisdictions.

Biting Demo - Non-Executive Director

Dr. Demo is a noted ICT industry expert who currently lectures on entrepreneurship and research
methods at the University of Nairobi’s Business School. Most of his research centers on the link
between ICT and small and medium enterprises in Kenya.

Vivek Badrinath - Non-Executive Director

Mr. Badrinath is the current CEO, AMAP Region for Vodafone having joined Vodafone and the
Executive Committee as CEO of AMAP in October 2016. In his current role, he oversees
Vodafone’s operations in the Vodacom Group, India, Australia, Egypt, Ghana, Kenya, Qatar, New
Zealand and Turkey.

Mohamed Shameel Aziz Joosub - Non – Executive Director

Shameel is the CEO of Vodacom Group since September 2012. He is a former CEO of Vodafone
Spain. He was previously the Managing Director of Vodacom South Africa from March 2005 to
March 2011 prior to taking up the position as CEO of Vodafone Spain. Prior to that, he was the
Managing Director of Vodacom.

Linda Watiri Muriuki - Non – Executive Director

Linda Watiri Muriuki serves as the Senior Partner at LJA Associates, she is a practicing Advocate
of the High Court of Kenya with over Twenty-Seven years’ experience ranked by Chambers and
Partners in 2015 and 2016.

Till Streichert - Non – Executive Director

Till was appointed as the Chief Financial Officer and Executive Director of Vodacom Group in
August 2015 after working as the Finance Director at Vodacom South Africa from February 2014.
He has more than 15 years’ experience supporting financial and operational transformations
through expertise in financial strategy, business leadership, revenue and profit growth in
international environments.

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3.1 Safaricom senior management
Bob Collymore - Chief Executive Officer

Bob is the CEO of Safaricom Limited, a position held since 1st November 2010. Previously he has
worked in the UK, Japan, and South Africa in a number of senior executive roles in Marketing,
Purchasing, Retail, Governance and Corporate Affairs. He has more than 30 years of commercial
experience working in senior executive roles in the telecommunications sector.

Stephen Chege - Director, Corporate Affairs

With a deep background in Regulatory and Legal affairs, Stephen is responsible for the Corporate
Affairs Division, which provides strategic support functions to Safaricom’s operations. These
functions include the Regulatory and Public Policy, Legal and Secretarial Services; Corporate
Responsibility (incorporating the Safaricom and M-PESA Foundations as well as Sustainability
Reporting); and the Corporate Communications functions.

Nicholas Mulila - Director, Risk Management

Nicholas Mulila is the Company's Director – Risk Management, responsible for the Risk
Management functions of the company that include, Enterprise Risk Management, Ethics and
Compliance, Revenue Assurance, Security and Anti-Money Laundering. He joined Safaricom in
2001 and has raised the ranks to become a member of Senior Leadership Team.

Joseph Ogutu - Director Strategy & Innovation

Joseph Ogutu joined Safaricom as Chief Corporate Affairs Officer in May 2005 from Telkom
Kenya where he was the principal assistant to the Managing Director and Chief Strategy and
Regulatory Officer. He then served as Chief Human Resource Officer from 2008 before taking on
the role of Director Resources in the March 2011 company reorganization.

Rita Okuthe - Director, Enterprise Business Unit

Rita joined Safaricom in August 2009 as Head of Consumer Segments, a role in which she proved
over the years to be invaluable in driving voice revenues through her great understanding of our
consumer behavior. She later held the role of Director Marketing until she was appointed as the
Director for Enterprise Business in March 2015.

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Denish Osodo - Director, Internal Audit

Denish is the Director Internal Audit a role he has held since October 2013. He is a seasoned
professional with 14 years’ experience in Audit and Risk Advisory Services. He previously worked
at PricewaterhouseCoopers (PwC) for several years, offering audit and business advisory services
to Companies in different industries during his stints in Kenya and United Kingdom offices.

Thibaud Rerolle -director, Technical & I.T

Thibaud Rerolle is the Director – Technology. He joined Safaricom in January 2012. Previously he
was the Chief Technology Officer at Orange Dominican in the Dominican Republic. He has a
wealth of experience having worked in senior management positions in France Telecom Group for
17 years in roles that covered Networks, Management, International assignments and Customer
services spanning 6 countries in Europe and South America.

Jannet Atika- Director, Customer Operations

Jannet is currently the Head of Customer Operations. She has over 21 years of experience working
in the telecommunication sector in various fields such as Public Relations, Sales, Marketing and
Customer Service. She joined Safaricom in November 2000 as a Retail Shop Manager and has held
various roles, including Care Centre Operations Manager and Senior Manager.

Sateesh Kamath- Chief Financial Officer & Executive Board Member

Sateesh is the Chief Financial Officer as well as Executive Board Member. He joined Safaricom
Ltd on August 1, 2016 from Vodacom Tanzania Ltd, where he was the Chief Financial Officer and
Executive Director on the board of Vodacom Tanzania.

Prior to joining Safaricom, Sateesh held senior roles over the last 12 years at both a global and
local level for Vodafone operations in London, Australia, New Zealand, Turkey and Fiji.

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 Board of directors

CEO

DIRECTOR DIRECTOR DIRECTOR

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 14
4.0 Michael porter’s analysis

4.1 Competitive Rivalry.

This looks at the number and strength of your competitors. How many rivals do you have? Who are
they, and how does the quality of their products and services compare with yours?

Where rivalry is intense, companies can attract customers with aggressive price cuts and high-
impact marketing campaigns. Also, in markets with lots of rivals, your suppliers and buyers can go
elsewhere if they feel that they're not getting a good deal from you.

On the other hand, where competitive rivalry is minimal, and no one else is doing what you do, then
you'll likely have tremendous strength and healthy profits.

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4.2 Supplier Power.
This is determined by how easy it is for your suppliers to increase their prices. How many potential
suppliers do you have? How unique is the product or service that they provide, and how expensive
would it be to switch from one supplier to another?

The more you have to choose from, the easier it will be to switch to a cheaper alternative. But the
fewer suppliers there are, and the more you need their help, the stronger their position and their
ability to charge you more. That can impact your profit.

4.3 Buyer Power.

Here, you ask yourself how easy it is for buyers to drive your prices down. How many buyers are
there, and how big are their orders? How much would it cost them to switch from your products and
services to those of a rival? Are your buyers strong enough to dictate terms to you?

When you deal with only a few savvy customers, they have more power, but your power increases
if you have many customers.

4.4 Threat of Substitution.

This refers to the likelihood of your customers finding a different way of doing what you do.

For example, if you supply a unique software product that automates an important process, people
may substitute it by doing the process manually or by outsourcing it. A substitution that is easy and
cheap to make can weaken your position and threaten your profitability.

4.5 Threat of New Entry.

Your position can be affected by people's ability to enter your market. So, think about how easily
this could be done. How easy is it to get a foothold in your industry or market? How much would it
cost, and how tightly is your sector regulated?

If it takes little money and effort to enter your market and compete effectively, or if you have little
protection for your key technologies, then rivals can quickly enter your market and weaken your
position. If you have strong and durable barriers to entry, then you can preserve a favorable position
and take fair advantage of it.

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4.6 Safaricom’s Michael porters five force analysis includes:

1. RIVALRY AMONGST EXISTING FIRMS

Industry rivalry usually takes the form of jockeying for position using various tactics.
(For example, price competition or advertising battles).

In most industries, one company’s competitive moves will have a noticeable impact on the
competition.

They will in turn retaliate to counter those efforts.

• Some types of competition, (for example, price) are very unstable and negatively influence
industry profitability.
• Advertising battles, however, may positively influence the industry, as they increase
demand or enhance product differentiation.

How safaricom deals with it

• Safaricom did a lot of Market research before launching major operations and products
• In 2000, Kencell got a head start on Safaricom and launched mobile services six months
earlier.
• It then took Safaricom six years to firmly win market leadership
• Focused on the risky, but rewarding low- end market against Kencell’s high end segment

2. THREAT OF NEW ENTRIES

The telecommunication business in Kenya is capital intensive and requires huge start-up capital and
technological expertise hence there is little threat to new entrants.

The sources of threats of entry are:

• Suppliers of economies of scale such as faiba

• Capital requirements
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 • Cost and quality advantages which are not available to potential entrants

• Restrictive government policies

• Customer loyalty and switching cost

How safaricom manages this

• Has strong corporate governance - Sustainability report states that Vodafone owned 40% of
it while GOK owns 35% of it (2015)
• Safaricom has heavily invested in key infrastructure i.e. fiber optic cables hence it is a
market leader
• The company has partnered with the government to roll out 3G and 4G technology
• Creation of its own products
• Marketing department ensures brand visibility e.g. BLAZE
• Readily available and young vibrant customer service
• Adds value to customer’s lives

3. THREAT OF SUBSTITUTES

A substitute product is one that may offer similar benefits to a company as a product from another
industry

Threat of a substitute is the level of risk that a company faces from replacement by its substitute

Airtel

• It offers free WhatsApp, Facebook and Twitter when you buy unlimited package.
• Tubonge gives 100 minutes for airtel to airtel calls and Ksh 2 to other networks, for Ksh 10
daily, Ksh 50 weekly and Ksh 150 monthly
Telkom

• Very affordable pricing.

• Holla bundles was introduced in 2012 to lure young subscribers into the network.

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Perceived level of product differentiation:

Product differentiation is the process of distinguishing a product or service from others, to make it
more attractive to a particular target market.

Airtel

In 2015, Airtel introduced roaming services offer for its customers traveling across Airtel’s Africa
countries dubbed “One Airtel”
This enabled visiting subscribers from all Airtel Africa countries to be treated as local customers in
terms of pricing and receiving free calls while retaining their home SIM card.

Telkom

Lowered its international call rates to the US, China, Canada and India from Ksh 30 per minute to
Ksh 20 per minute

HOW Safaricom manages this:

• Safaricom managed this by introducing FLEX bundles, which gives the customer the
flexibility to switch between internet, calls and SMS
• Safaricom, in 2016, reduced roaming charges for calls and data up to 90% for over 200
networks across the world, at the rate of Ksh 14 per MB.
• China, for example, is a favorite destination for many business people and Safaricom
charges Ksh 50 to call back home and enjoy a low of Ksh 10 per minute to call within
China, down from the former rate of Ksh 360 and Ksh 130

4. BARGAINING POWER OF BUYERS

Consumers’ bargaining power influences an organization’s competitive strategy

A strong buyer can make an industry more competitive and decrease profit potential for sellers.

If a customer gets dissatisfied by the quality of a product/service or pricing of a certain

organization, they can switch to rivals
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an organization therefore must offer quality services and affordable prices in order for them to have
a large market share.

For Safaricom, a product is important to a customer; when customers cherish a particular product
they end up paying more for it.

HOW Safaricom manages this:

Safaricom dominates this market due to the superiority and reliability of goods and services, e.g.
MPESA

• They offer quality network coverage

• Buyer information- customer care, and giving quality services to customers
• Brand identity- Safaricom is well known across the nation
• Buyer volume- most people use or have Safaricom sim card as their main line
• Knowledge of substitutes available, therefore they keep up with new innovation and
changes in the industry

5. BARGAINING POWER OF SUPPLIERS

Refers to the ability of a supplier to:

• Raise prices of supply

• Lower the quality of product/services

• Reducing quantity of products and services they can supply

The lower the number of suppliers the more power they have and vice-versa

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 Safaricom vs Suppliers

How Safaricom manages this:

• Annual Suppliers Forum to hear concerns & exchange ideas and information with them.
(surveys
• Evaluation of cost, quality, delivery, flexibility, responsiveness, value-add, health and
safety) and a performance score is calculated
• Supporting suppliers failing to meet required standards
• Code of Ethics for Business in Kenya.

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5.0 THE INDUSTRY SAFARICOM IS OPERATING IN.
5.1 SERVICE INDUSTRY
There are a number of ways to identify the sector, its divisions, its industries, and the types of jobs
within them. The general category of the service division includes a wide variety of industries, but
can be categorized into primarily consumer-oriented (providing a service directly to a consumer),
primarily business-oriented (providing a service directly to another business) or mixed (providing
services to both businesses and individual consumers).Alternately, the services division activities
can be described by their economic activities as physical, intellectual, aesthetic, and other
experiential activities.

Safaricom has many services that they offer to the local industry:

• Mpesa

• Corporate internet

• Buy goods and services

• Email services

These services will be describer later on under the processes and technology of Safaricom.

5.2 ENVIRONMENTAL FORCES
Safaricom has many environmental forces that influence it:

• CSR through transformation of lives of its customers, communities and colleagues

The waste electrical and electronic equipment recycling

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 6.0 The products and services provided by safaricom ltd.

Product Description

M-shwari This is a banking product exclusively for M-PESA customers provided by

Commercial bank of Africa (CBA) in partnership with Safaricom. M-Shwari
provides financial access to millions of Kenyans who previously had no access
allowing them access micro savings and micro credit straight from their phones.

M-shwari This is a savings account that allows M-Shwari customers to save fund for a
lock savings defined purpose, for a specified amount and within a specified period

M-pesa 2014 2015

growth
Deposits 104,955,132,618 125,298,015,514

Transfers 92,116,902,245 107,396,348,247

Withdrawals 90,264,165,528 107,065,238,244

B2C 14,183,972,826 29,303,669,495

C2B 14,767,038,267 24,536,550,463

Airtime 3,954,745,855 4,868,556,607

M-KESHO Deposits 2,036,686,967 2,364,464,562

Buy Goods 5,647,048,109 13,387,019,244

IMT 565,608,224 1,011,196,047

M-sure pay This is a new service launched by Safaricom that allows organizations such as
World Food Programme to track funds sent to beneficiaries via M- pesa.

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M-pesa and This allows M- pesa customers to send and receive money to and from Tanzania.
Vodafone

KCB M- This is a mobile savings and loan product service.

pesa

Okoa stima This allows one to borrow any amount they require based on a predetermined
limit given by their historical relationship with Kenya Power & pay their post
pay or prepaid KPLC bills by dialing *885# from the mobile.

M-pesa Migration of the current M- pesa G1 platform to allow an enhanced G2 platform

G2platform that will allow for faster transactions, improved stability as well as enable more
functionality from the service.

E- citizen Safaricom partners with the Government of Kenya to provide one Pay bill
number 206206 for use in payment of government services through the
government’s e-citizen platform.

Real time This is a service that allows partners to receive funds after withdrawal from their
settlement merchant tills real-time in their bank account. So far 17 banks have been on
boarded for the RTS service:

• Equity Bank
• Kenya Commercial Bank
• Co-operative Bank
• Diamond Trust Bank
• NIC Bank
• Standard Chartered Bank
• Consolidated Bank
• CFC Stanbic Bank
• National Bank of Kenya
• Chase Bank
• Bank of Africa
• Gulf African Bank

24
 • Commercial Bank of Africa
• First Community Bank
• Credit Bank Kenya
• United Bank for Africa
• Jamii Bora

1st M-pesa Safaricom opened up the API for M-pesa to third-party developers, a move that
developers will encourage innovation and attract more traffic onto the mobile money system.
initiative

M-Akiba Safaricom in partnership with the government launched a product that allows
launch Kenyans to be able to open Central Bank depository accounts from their phones
without visiting a bank or broker, and can then buy government paper for as little
as Sh3,000 shillings.

Hakikisha A service that allows customers to confirm the name of the recipient before
sending funds, withdrawing funds and paying bills

New KCC Safaricom formed a partnership with Kenya Co-operative Creameries (KCC) to
cashless deploy a cashless payments service to enhance business efficiency and address
solution the risks associated with cash handling. Through a mobile application, over 200
sales and distribution agents for New KCC will be able to place and process
orders, access live delivery reports, create invoices and make payments. The app
will also generate regular reports to ensure accountability and for record keeping.

M-Tiba This is a mobile centric platform approach that seeks to provide better
coordination of Health care services between payers, patients and providers

International This service allows anyone wishing to send money to Kenya to visit a Safaricom
Money IMT partner and send money to an M-PESA mobile phone in Kenya. The
Transfer transaction is similar to a traditional cash-to-cash money transfer, except that the
sender specifies the recipient’s mobile phone number at the time the funds are
sent. Recipients in Kenya must subscribe to the M-PESA service through
Safaricom to access the service.

25
7.0 Market for the company
Voice calls and text Allows an entrepreneur the ability to make calls at reasonable
messages. rates and incase of need for sending messages the service provider
offers you this entity at a cheap rate.

This is a product that enables safaricom users to send and receive

money from across Kenya Uganda and Tanzania.
m-pesa service

Safaricom has enabled its users to have internet connectivity

throughout the network whereby it offers home network like
Faiba and also on handsets it has the availability of one
safaricom internet and
purchasing bundles which varies in prices. The use of modem has
modems
allowed users to have connectivity on the go through use of the
modems which connects wherever and whenever.

Safaricom has set up outlets all over the country where it offers
genuine products with an assurance of a warranty.

At this website organization get to get services like cloud

computing, audio and video conferencing, dedicated and virtual
server services, application hosting services, data storage services,
domain hosting, safaricom fixed data, managed IP-VPN, managed
Wi-Fi connectivity, managed wide area network.
Handsets, laptops, netbooks,
This is a service that allows users registered with safaricom mpesa
computer peripheral devices
to have a savings and loans account in their mobile phones.

This is a service offered by safaricom where the users are able to

loan and activate their electricity through a borrowing portfolio

26
 SafaricomBusiness.co.ke which gives them a limit based on their previous activities with
the KPLC.

This is a product offered by safaricom limited whereby users are

able to have connectivity to electric services whereby once
installed the users can pay as low as a hundred shillings for
electrical usage per day.

This is a service offered by safaricom whereby the it provides

an easier and well-coordinated health care services between
the health service providers and the patients needing this
service.
KCB mpesa

Okoa stima

M-solar

M-tiba

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8.0 TYPE OF TECHNOLOGY USED BY SAFARICOM

There are very many technologies used by Safaricom. The technology makes work easier for
both the organization and the consumers.

Some of the technologies used by Safaricom include:

8.1 FLASHBACK SERVICE

As a result of the limited income of most of Safaricom's customers, network congestion emerges
from a practice called 'flashing'. Flashing is the practice of calling another mobile user, but
disconnecting before the connected call is answered. It provides a method for mobile users to
alert someone that they wish to be called, but either can't, or won't, pay for the call. The method
is cost-free for the users; but costly in network bandwidth.

That is why Safaricom introduced a flashback service that gave every subscriber five free SMS
messages with a single pre-defined message stating "Please call me. Thank you". Although the
messages can be annoying when sent just for fun they can prove useful when one is in trouble
and has no airtime. It also gives parents more of a reason to get mobile phones for their children
without the real need for getting them airtime.
8.2 ELECTRONIC CASH SERVICE

In January 2007, Safaricom launched a nationwide mobile banking service called M-PESA that
allows Kenyans to transfer money via SMS.

The service does not require users to have bank accounts, an important aspect in a country like
Kenya, where many people do not have bank accounts. With M-PESA, the user can buy digital
funds at any M-PESA agent and send that electronic cash to any other mobile phone user in
Kenya, who can then redeem it for conventional cash at any agent. This system is remotely
comparable to hawala banking or services like Western Union. An M-PESA-enabled mobile
phone can also function as an electronic wallet and can hold up to 100,000 Kenyan
shilling (approx. US$1,000). Safaricom has announced that it intends to roll out M-PESA to
other countries.

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8.3 KIPOKEZI SERVICE
Safaricom launched the Kipokezi service in May 2000 that enabled its subscribers to send and
receive email and online chat through standard mobile phones. The service does not require users
to have an Internet connection as it uses Forget-me-not Africa’s Handset Initiation technology.
Prior to the service fewer than one in ten Kenyans had accessed the Internet but the Kipokezi
launch allowed more than a third of the population to exchange email and online chat messages.

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9.0 THE PROCESS OF HOW SAFARICOM OPERATES
9.1 Safaricom Business Model:
The Safaricom business model explains how they operate and how they execute their strategy to
achieve their vision of transforming lives. Safaricom remains the largest mobile operator in Kenya
serving over 25 million customers. Their services include mobile and fixed voice, messaging, data,
internet and M-PESA, a mobile-based money transfer and cashless payment platform. Their goal
remains to transform lives with unmatched, innovative and superior products and services that meet
the needs of Kenyans.

Input:

Network - Their operations consist of Safaricom House 1, 2 and 3, the Safaricom Care Centre, the
Jambo Contact Centre, 44 retail stores and a network of 3,800 2G-, 2,517 3G- and 463 4G-enabled
base stations. They cover 95% of the population on 2G and 78% on 3G.

Relationships - They rely on the relationships with their 25.2 million customers, 100,744 M-Pesa
agents, 456 dealers, 1,094 suppliers, business partners, shareholders, regulators, 4,287 employees
and other stakeholders to remain socially relevant and operate as a responsible corporate citizen, in
order to deliver their business strategy.

Core Business Activities and Processes:

CORE PROCESSES –

• Enterprise Business: Offers business solutions to business customers.

• Consumer Business: Offers products and manages the distribution channels catering to the needs
of individual customers.

• Financial Services: Offers mobile financial services and solutions.

• Regionalization: Co-ordination of their decentralized approach.

CUTTING ACROSS BOTH CORE & SUPPORT PROCESSES –

• Customer Experience Excellence: Ensures that they adopt a customer centric approach to all
aspects of how they do business.

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• SUPPORT PROCESSES Technology which will assist in Risk Management, Corporate Affairs,
Internal Audit, Customer Operations, Marketing, Strategy and Innovation, Resources, Finance

Safaricom’s Operational Strategies:

Safaricom is the leading provider of converged communication solutions in Kenya. In addition to

providing a broad range of first-class products and services for Telephony, Broadband Internet and
Financial services, Safaricom seeks to uplift the welfare of Kenyans through value added services
and support for community projects.

The key strategies adopted by the firm are product differentiation, supply network, risk
management, capacity utilization and to a less extent cost leadership strategy.

Adoption of superior operations management results in increased profits in the mobile company,
elevated customer base, influence the effectiveness of the firm’s practices and leads to reduced
operations costs of the mobile company.

Process Of How Safaricom Operates:

• Responsible for achieving the consumer-commercial target of Net Promoter Score, Gross
Revenue, Net Revenue, EBITDA Cash Flow & growth in subscriber gross adds.

• Design and execute the business unit strategy &drive the performance of Safaricom Brand
in the market.

• Drive strategic partnerships and collaboration with internal cross functional leadership,
external vendors and channel partners.

• Develop innovative market development opportunities.

• Lead and drive consistent market execution strategies and initiatives enabling excellence in
operations across the region embedding the Sales Excellence Execution Daily execution
standards.

• Drive and champion all digital transformation strategies and initiatives in the region
including the adoption of the Sales Force Automation initiative.

• Support the enterprise ‘go to market’ channel structure at the region.

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 • Play a leadership role in the Safaricom Foundation initiatives in the region.

• Lead in the delivery of ‘Best Network for You’ customer promise for the Region.

• Lead the team in creating and sustaining a work environment driven by an enabling
coaching culture.

• Build and develop high performance teams and drive superior performance standards

There are three different types of business processes:

. Primary processes (also called essential processes)

. support processes
. Management processes

Primary processes: Primary processes are end-to-end, cross-functional and deliver value to
customers. Primary processes are often called critical processes, as they represent the essential
activities that an organization performs to accomplish its mission. These processes make up the
value chain where each step adds value to the previous step as measured by its contribution in the
creation or delivery of a product or service, ultimately generating value to customers.

Support processes: These are designed to provide support for primary processes, often by the
management resources and or infrastructure required by primary processes. The key differentiator
between primary and support processes, is that support processes do not generate direct value to
customers, while the primary processes yes. Common examples of support processes include
information technology management, management of infrastructure or capacity, and human
resource management. Each of these support processes can involve a life cycle of resources and are
often associated with functional areas.

Management processes: Management processes are used to measure, monitor and control business
activities. Such procedures shall ensure that a primary process, or support, meet operational goals,
financial, regulatory and legal. Management processes not directly add value to customers, but are
required to ensure that the Organization to operate effectively and efficient

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10.0 Challenges and solutions.
1. Competition.

Challenge: With the rise of other communication networks in the industry, for example KenCel
communication limited and Telcom Kenya limited, safaricom has experienced competition. Many
of this networks are better in their game than safaricom. This is in terms of either offering cheap
services or higher quality services than safaricom.

Solution: Safaricom should push back on regulation that are interest in the economy growth. It
should also make give its clients even more high quality services that will benefit all customers
from all walks of life. This helps the company reach all their customers.

2. Poor connection.

Challenge: Sometimes safaricom has poor network. In other parts of the country, customers lack
network especially in the rural areas. This may make clients shift to other communication networks.
People from the rural areas opt for a network that is available to them.

Solution: Safaricom should upgrade their network systems. This can be either done by involving
network specialist who will help them in this. The communication network should also reach out to
the rural areas either by extending their network lines and planting more boosters. This will enable
them get more clients from the rural areas.

3. Level of customer care and service provider were not satisfactory.

Challenge: Most times subscribers complained that they had a hard time reaching the customer care
lines when they had issues. The service provider was not satisfactory as they expected.

Solution: Safaricom can set up more ways in which customers will be able to contact their clients.
For example, have many contact numbers, more email accounts, add more websites where
customers can be able to find solutions to their problems, they can also employ more customer care
employees.

Since the main purpose of safaricom is communication, they can mainly focus on service providing,
this will also be a solution.

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 4. Limited market.

Challenge: At first, safaricom’s telegraph cables laid alongside Ugandan Railway reached Nairobi
in 1898. This means that people from other parts of the country would not be able to get the
services till they extended to Mombasa in 1908. This was rather a slow process even after they
discovered they only had eighteen telephone subscribers in Nairobi.

Solution: Safaricom should reach out to more people to for a large market scale. Especially with the
funds they get from the subscribers, they should even reach the international market target. They
should extend their telegraph cables to the rural areas and countries far from their main market
Kenya.

5. Limited ownership of a phone- serving business premises and government offices mainly,
and a few households.
Solution: reduce the cost of owning a phone so that many people could afford.

6. Difficulty coping with the demand as many customers, both corporate clients and customer
buyers queued at Ken Cell’s appointment dealers to subscribe for a wireless line.
Solution: they could make the service available online so that the clients could access it wherever
they are. This would also save on time.

7. Limited market. They created a network infrastructure that would roll out wireless telephone
services.
Solution: they could give away desirable or fun items to gain goodwill, build brand awareness and
connect with potential customers. They don’t need to be expensive. Everyone loves free gifts.

8. The company Lacked finances that were required to put up with the wide network to cover
the mass market.
Solution: If the current plan of action, including company expenditures on advertising, products
and employees, isn't working out, it may be time to commit to some changes. The business
owners can also seek loans and grants specifically designed to help give the company a boost.

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11.0 CONCLUSION
Safaricom has been successful due to a combination of factors especially its marketing mix of
the seven (7Ps) of the other strong marketing strategies. It has also managed to partner with
several parties with the aim of enhancing its brand name and increasing its customer’s base.

Safaricom’s mobile banking product MPesa has been widely successful in Kenya, but similar
products have not taken off in countries like South Africa or India.

As we saw the missions, visions, goals and policies of Safaricom were clearly stated in the paper
above. The work of mission and vision is for a firm to be goal oriented. Thus, the mission and
vision helps Safaricom to follow their goals.

In conclusion, Safaricom admits it still has plenty to figure out and as it learns lessons, it has
pledged to share them with others. After all, taking a wider view of success is part of the point. As
seen in the case study, safaricom has come a long way in fighting and providing the best t its
subscribers. It has also not been an easy journey for them to be the best communication network
ever since. All the way from its start, to its leadership, services they provide to their challenges.
As CEO Bob Collymore says, “businesses cannot be successful when the society around us fails.

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12.0 RECOMMENDATIONS
In the case of networks in Kenya program Safaricom should:

• Increase 3G population coverage from 69% to 80%

• Extend 4G deployment to additional 13 towns and cities across Kenya

• Implement big data capability to improve customer experience

• Continue to roll out fiber to additional 10 towns and connect another 200 base stations

• Fiber to the Building(FTTB): reach 1,000 commercial buildings

• Fiber to the Home (FTTH): reach 8,000 homes in 50 residential estates

For the mobile data coverage:
• Increase smartphone, 3G, and 4G devices penetration to stimulate usage

• Commercialize the Safaricom Home Broadband proposition “The Big Box”

• Nurture and expand partnerships with local & global content providers

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