Use two dimensions of the PESTEL (political, economic, sociocultural, technological, environmental, and

legal) framework and in a 500 words post, evaluate the macro-environment of a company you are
familiar with.

Keroche

Sportpesa

Safaricom- Economic,Technological

PESTEL is useful for understanding market growth or decline. Its primary focus is on the future
impact of macro environmental factors (Johnson and Scholes, 2002). Generally, every organization
has a unique environment, even organizations within the same industry have environments unique to
them (Mintzberg et al, 2009).

Safaricom PLC is a telecommunications giant listed on the Nairobi Securities Exchange with annual
revenues of close to KES 298 Billion ($2.5 billion). The company provides mobile telephony, mobile
money transfer, consumer electronics, ecommerce, data, music streaming, and fibre. It is the home of
M-pesa, a mobile banking SMS-based service. Safaricom controls approximately 64.5% percent of the
Kenyan market with a subscriber base estimated at 42 million. The company was founded in 1997 as a
fully owned subsidiary of Telkom Kenya. In May 2000, Vodafone Group PLC acquired a 40% stake and
management responsibility and in 2008, the government sold 25% of its shares to the public through the
Nairobi Securities Exchange (Safaricom Website).

Its success can be attributed to technological and economic factors. Before Safaricom, there were big
players in the telecommunications sector in the form of Kencell (Zain, Airtel) and Telkom (Orange).
However, the two failed to capitalize on technological and economic factors early on and have lagged
behind ever since.

On the technological front, Safaricom has invested in innovation, improving core infrastructure and
making mobile telephony cheaper and more accessible. In 2007, Safaricom launched M-pesa, a mobile
money transfer and payments service that propelled the company to become a leader in mobile money.
M-pesa spread like wildfire growing their subscriber base to 10million in 2008 due to the convenience
and speed of the service. Safaricom has continued investments in developing M-pesa. This year, M-pesa
surpassed voice and data to become their largest revenue stream. Besides M-pesa, Safaricom has
launched various innovative products such as: ecommerce (Masoko), music streaming services (Jazz,
Skiza Tunes), savings and overdraft facilities by partnering with leading banks (M-Shwari and Fuliza) and
is now on a mission to transform into a technology company by 2025.

On the economic side, Safaricom has financed technological, human and capital investments over the
years. Safaricom’s services are available countrywide, in several countries across and outside Africa.
They have revolutionized the financial and business sector by driving rural and urban development
through 4G, 5G internet and fiber. Safaricom partnered NCBA Bank and came up with a revolutionary
banking product, M-Shwari, which allows M-Pesa customers to save and borrow money while earning
interest on money saved tapping into an underdeveloped financial services market. It is such
innovations that keep the company top by opening up new revenue streams and providing convenience
for their customers. This year, Safaricom clocked 30million active monthly users for Mpesa and with an
entry into Ethiopia, the sky is the limit.

Safaricom’s competitors are now playing catchup. This success has driven them to petition the
authorities to break up Safaricom citing market dominance. However, this is a perfect case of proper
strategic analysis that takes advantage of macro-economic factors.