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Safaricom Ltd Company is an integrated Communications Company, providing voice, data, and financial
(mobile Money) products and services to consumers, business and public sector clients. It is a public
limited company operating solely in Kenya and the headquarters are located at Safaricom house in
Nairobi which is the main market.
Their operations consist of Safaricom house 1, Safaricom care Centre, Jambo contact Centre, 42 retail
stores and a network of 2G/3G/4G enabled.
Their Shareholding Structure is composed of the Government of Kenya (35%), Vodafone (40%) and free
float (25%). The company is listed on the Nairobi stock exchange market, trading in the
telecommunications and technology segment.
The descriptions of the services offered are as follows:
 Voice: prepaid and post-paid voice plans.
 M-Pesa: A fast, safe and affordable way to send and receive money and pay for goods and services
via mobile phone.
 Messaging: SMS bundles, mms, call back SMS notifications for missed calls and ‘please call me’
messages.
 Mobile data: high speed data connectivity for access to the internet through fixed and mobile
broadband.
 Fixed Services: Wireless services, fixed lines and mobile solutions.
Products offered are mobile handsets, mobile broadband modems, routers, tablets, note books and laptops
Their key competitors are Airtel but have a small market share in the country.
The team environment is of the project team which is a team of 15 members and its operating in the
Nairobi headquarters.
 Question 1 15 Marks

(450 words)
The system of economic activities including production, consumption, and investment that predominate in a
given region is referred to as the economic system. Depending on the sort of economic system, actors like
the government and private organizations play different roles and have different levels of importance
(Vaidya, 2023).

An area or country's resource needs are determined by the economic system, which also implements
strategies for allocating those resources. This need is based on how commodities and products are produced,
distributed, and consumed in an economy. The arrangement is based on four parameters: who should receive
what, how much should be produced, and how to create it. The notion of the economic system is further
clarified when these four factors are recognized (Vaidya, 2023).

Types of Economic Systems

The world has a wide variety of economies. Despite having some commonalities, each has unique qualities
that set it apart. Every economy operates under a certain set of circumstances and presumptions. Traditional
economies, command economies, mixed economies, and market economies are the four primary types of
economic systems (CFI Team, 2023).

1. Traditional economy

It is based on and lends weight to a nation's citizens' customs and traditions. People use trade or barter
systems to survive, and culture has an impact on the production, distribution, and policies. The main
industry is agriculture. The arrangement is mostly seen in developing and impoverished countries. Another
name for it is a subsistence economy. It is also thought that every other economy has a past that includes the
traditional system, and that if one looks closely, one can still detect remnants of the traditional economy in
every other economy (Vaidya, 2023).

In a traditional economy, communities and cultures adhere to their long-standing traditions and are not
dominated by technical advancement. It mostly revolves around local families and communities and runs on
a barter system. In return for completed items, they often export agricultural products and raw resources to
richer countries.

2. Command economic system

In command economies, the government has complete control over every aspect of the economy, including
pricing, distribution, and production. An illustration of a command economy is North Korea. In this system,
all businesses and resources are owned by the government, and the general public has little to no say in how
the economy is run. This system has the potential to be successful in accomplishing particular objectives,
such quick industrialization, but it also has the potential to result in inefficiencies and a lack of creativity
(Vaidya, 2023).

In theory, the command system works very well as long as the central authority exercises control with the
general population’s best interests in mind. However, that rarely seems to be the case. Command economies
are rigid compared to other systems. They react slowly to change because power is centralized. That makes
them vulnerable to economic crises or emergencies, as they cannot quickly adjust to changing conditions
(CFI Team, 2023).

3. Market economic system

Market economies are structures where people and businesses base all of their economic choices on supply
and demand. The market economy in the US is an illustration of this. In this system, firms are encouraged to
innovate and produce efficiently in order to turn a profit. Prices are determined by supply and demand. The
biggest drawback of a market economy is that it permits individual entities, especially those that own highly
valuable resources, to assemble significant amounts of economic power. Because those who are
economically successful control the majority of the resources, their distribution is not equitable (CFI Team,
2023).

4. Mixed system

Command and market economies are combined to form mixed economies. Numerous nations in Western
Europe, including France and Germany, are examples of mixed economies. In this system, private
companies run some industries like manufacturing and finance while the government handles some public
goods and services like healthcare and education. The goal of mixed economies is to mitigate the drawbacks
of both market and command economies while balancing their advantages. However, managing mixed
economies can be challenging, and finding the right balance can be difficult (CFI Team, 2023).

In conclusion, the values and priorities of a society influence the choice of an economic system. However,
command economies can also result in inefficiencies and a lack of innovation. Command economies can be
successful in achieving specific goals. Although market economies can promote efficiency and innovation,
they can also result in inequality and a lack of access to essential goods and services. Although they aim to
balance the advantages of both systems, mixed economies can be complex and challenging to manage. In the
end, a prosperous economic system necessitates a careful balancing of public and private ownership,
regulation, and innovation.
 Question 2 25 Marks

(750 words)
An analytical framework known as a PESTEL study is frequently used to assess the business environment in
which a corporation operates. Political, Economic, Social, and Technological (PEST) analysis was the term
used in the past to describe the framework; more recently, the framework's scope was expanded to
incorporate environmental and legal considerations. Management teams and boards apply the framework in
their corporate risk management planning and strategic planning processes. PESTEL research is likewise a
well-liked technique in the financial analyst community, where elements may affect model assumptions and
financing choices, and among management consultants who assist their companies in creating new product
and market efforts (Barrington, 2021).

Conducting a thorough situational analysis is essential before implementing any kind of strategy or tactical
plan. Every six months, this study should be performed again to look for any changes in the macro-
environment. Organizations that properly track and react to macroenvironmental changes might set
themselves apart from the competition and so have a competitive advantage (Barrington, 2021).

In this assignment, the strategic consequences of four key external factors will be discussed and illustrated
using Safaricom, a Kenyan telecoms business.

Political factors

These determine the potential impact of the government and government policy on a company or an
industry. In addition to trade, economic, and taxation policies, this would also involve political stability and
policy. Safaricom's activities are significantly impacted by the political climate in Kenya. The government
supervises the distribution of resources, including radio spectrum, and regulates the telecommunications
sector. The business has also come under fire for holding a monopoly on the telecoms industry. In order to
secure a favorable regulatory environment, Safaricom must seek to preserve strong connections with the
government and regulators. This is the strategic meaning of these political considerations (Barrington,
2021).

Economic factors

An economic component directly affects the economy's performance, which directly affects the
organization's profitability. Interest rates, employment and unemployment rates, the cost of raw materials,
and currency rates are all factors. Safaricom has a big opportunity given the increasing middle class and
burgeoning Kenyan economy. The corporation must, however, also handle inflation and the erratic value of
the Kenyan shilling. Safaricom is also susceptible to changes in the regulatory environment, taxes, and
levies due to its reliance on revenue from mobile money services like M-PESA. Due to these economic
circumstances, Safaricom must diversify its revenue sources and make investments in new technologies in
order to remain profitable and competitive (Barrington, 2021).

Social factors

Here, recognizing new trends and the social environment are the main concerns. This aids a company in
better comprehending the requirements and desires of customers in a social context. Changing family
demographics, educational attainment, cultural fads, attitudinal shifts, and lifestyle changes are among the
contributing factors. Kenyans tend to be youthful, well-connected, and have high mobile penetration rates.
Safaricom now has new prospects in mobile banking and e-commerce due to the growth of social media and
mobile payments. The business must, however, adapt to shifting customer desires as well, such as those for
faster internet and more data privacy. These social considerations have the strategic meaning that Safaricom
must keep innovating and provide new goods and services to satisfy shifting consumer demands
(Barrington, 2021).

Technological factors

The rate of technical innovation and development that could have an impact on a market or sector is one of
the technological aspects. Changes in digital or mobile technologies, automation, and research and
development may all be factors. It is common to merely pay attention to technological advancements in the
digital realm, but distribution, manufacturing, and logistical innovations must also be taken into account.
Safaricom's operations are centered around technology, and the business must constantly innovate to be
competitive. The emergence of new technologies like 5G and artificial intelligence may cause disruptions in
the telecom sector and open up new business possibilities. These technical developments have the strategic
meaning that Safaricom must continue to make research and development investments in order to stay ahead
of the competition (Barrington, 2021).

Legal factors

An organization has to be aware of the rules and regulations of the countries where it conducts business.
They also need to be informed of any changes in the law and how they can affect how their firm is run.
Employment law, consumer law, health and safety laws, international trade regulations, and other factors are
among them. The activities of Safaricom may be impacted by legal issues including data protection
legislation and cybersecurity requirements. The business has furthermore had legal difficulties, such the
2018 data breach. Due to these legal considerations, Safaricom is strategically required to maintain
compliance with all applicable rules and regulations and to make investments in cybersecurity measures to
guard against potential data breaches (Barrington, 2021).
Environmental factors

Environmental variables are those that are impacted by ecological factors and the environment around them.
This component is becoming increasingly crucial to how businesses should operate as CSR (Corporate
Sustainability Responsibility) and sustainability become more and more important. Climate, recycling
practices, carbon footprint, garbage disposal, and sustainability are all factors. Environmental sustainability
is a concern that businesses must consider more and more. Safaricom must think about how its activities
may affect the environment because of its massive infrastructure. These environmental considerations have
the strategic meaning that Safaricom must give sustainability a high priority in its operations, including
spending money on renewable energy and lowering its carbon footprint (Barrington, 2021).
 Question 3 30 Marks

(900 words)
An intriguing marketing framework that may be applied in several ways is the 5Ms of marketing. In order
for the marketing plan to be effective, it picks up on five main internal components that must be handled.
Manpower (Staffing), Materials (Production), Machinery (Equipment), Minutes (Time), and Money
(Finances) are the five components that need to be taken into account as assets that the organization has
committed to its present marketing strategy. Several different applications for the model itself are possible
(MacAllister, 2019).

It can be used as an auditing tool as part of the strategic planning process in order to analyse the internal
elements which are supporting the current marketing strategy. Once identified an assessment can then take
place in order to help make a judgement as to whether those assets are being used to their best advantage.

The 5Ms of Marketing can be used in order to identify the internal resources required to implement a
proposed marketing strategy.

Money

Safaricom has a solid financial standing and is a lucrative business. The company's overall revenue for the
fiscal year that ended in March 2022 was KES 262.5 billion, up 4.8% from the year before. In comparison to
the prior year, the company's net profit after taxes increased by 19.5% to KES 71.7 billion. As of March
2022, Safaricom has KES 18.4 billion in cash and cash equivalents, which is a significant amount of cash.
The business pays out dividends at a rate of 80% of net income, giving stockholders a respectable return.
These financial advantages have a strategic relevance in that they provide Safaricom the means to invest in
cutting-edge technology and explore business expansion prospects (MacAllister, 2019).

Men

Safaricom employs a staff that is both talented and varied. Over 6,500 people work for the company, and
52% of them are women. The business values diversity and inclusion strongly and offers all employees the
same possibilities. Additionally, Safaricom has a strong training and development program that includes
coaching, mentoring, and on-the-job training. The management staff of the business is knowledgeable and
has a successful track record. These human resource advantages have a strategic relevance in that they
enable Safaricom to attract and keep top people, which is crucial to the ongoing success of the business
(MacAllister, 2019).

Machinery
The infrastructure of Safaricom is extensive and intricate, and it consists of data centers, fixed-line networks,
and mobile networks. To provide its consumers high-quality services, the business has made significant
investments in its infrastructure. Additionally, Safaricom has a strong supply chain that includes companies
that provide devices, network equipment, and other materials. The business places a priority on
technological innovation and has introduced a number of new goods and services, including the ground-
breaking mobile money service M-PESA. These mechanical advantages have strategic ramifications in that
Safaricom may maintain a competitive edge by putting money into new technologies and expanding its
infrastructure (MacAllister, 2019).

Minutes

Minutes are a measure of production and time. Safaricom places a high priority on efficiency and
productivity. With an average monthly downtime of just 3 minutes, the company's mobile network has a
high availability rate. The business also has a strong customer service strategy that includes a contact center,
social media assistance, and in-person assistance at retail locations. Automation and digitalization, which
increase production and cut costs, are highly prioritized by Safaricom. These points of strength have
strategic implications for Safaricom, allowing it to sustain high levels of customer satisfaction and boost
operational effectiveness (MacAllister, 2019).

Materials

Materials are the inputs that are utilized in a company's manufacturing process. A well-established supply
chain for Safaricom comprises companies that provide devices, network equipment, and other components.
The business places a high priority on sustainability and has started a number of programs to lessen its
environmental effect. The corporation has started a number of projects to assist issues including education,
health, and other social concerns. Safaricom also places a lot of emphasis on corporate social responsibility.
By promoting sustainability and social responsibility, Safaricom can maintain a positive reputation and
brand image, which has strategic implications for the company (MacAllister, 2019).

In the grand scheme of things, Safaricom excels in all five Ms. In addition to having a vast and sophisticated
infrastructure, a trained and diversified personnel, a solid financial position, and a supply chain that has been
in place for some time, the firm also has a robust supply chain. The business is also very concerned with
social responsibility, sustainability, and technological innovation.
 Question 4 30 Marks

(900 words)

Ansoff Matrix is a tool that may assist executives and marketers in a business in figuring out how to grow
and developing plans for doing so. The matrix incorporates market penetration, market expansion, product
development, and diversification, all of which are growth options that a company may utilize to expand its
reach into new markets or expand its line of products. Each of these solutions has some amount of
implementation risk, which organization leaders can evaluate before utilizing the strategy (Kavagna, 2018).

I will discuss how each of the Ansoff's Matrix approaches might provide Kenyan telecoms company
Safaricom a competitive edge in this post.

Market Penetration

The first quadrant of the Ansoff Matrix represents the market penetration approach, which also has the
lowest risk of the four growth alternatives. It occurs when a company makes an effort to expand its offers in
a market where it already has an established presence. By discovering new clients in the same market or
selling more of its products to an existing customer base, market penetration aims to improve an
organization's market share (Kavagna, 2018).

Safaricom might concentrate on expanding its customer base and enticing current clients to consume more
of its goods and services in order to achieve a competitive edge through market penetration. By expanding
its network coverage and raising the caliber of its services, Safaricom might do this, among other things. By
doing this, Safaricom can set itself apart from its rivals and provide its clients more for their money.

Market Development

The second quadrant, known as market development, is when a business makes use of its present products
and makes an effort to expand into new markets. If a business is local, this might mean expanding to other
cities, other states, or even other countries. It is a market development growth strategy whenever an
organization expands from its present market into a new one where it does not yet exist, regardless of the
nature of the new market (Kavagna, 2018).

Safaricom might broaden its operations into other African nations where there is a considerable demand for
telecommunications services in order to acquire a competitive edge through market expansion. Safaricom
could swiftly build a significant presence in these countries and gain an edge over other telecom providers
by making use of its current brand, resources, and knowledge.

Product Development

When a business develops new products for its current market, it falls under the third category of the Ansoff
Matrix, product development. A growth plan for product development is just as hazardous as one for market
development. Customers will have more options from the company's enlarged product portfolio thanks to
this strategy (Kavagna, 2018).

Safaricom should spend in creating fresh, cutting-edge goods and services that cater to the shifting wants of
its clientele in order to obtain a competitive edge through product development. Safaricom might, for
instance, make investments in the creation of fresh digital services like mobile banking, e-commerce, and
mobile healthcare. By doing this, Safaricom can set itself apart from its rivals and offer distinctive value to
its clients.

Diversification

Diversification is the fourth and last component of the Ansoff Matrix, and it presents the greatest danger to
companies. Using new products, services, or other offerings, an organization wishing to expand into new
markets. This is the riskiest since it includes an unproven product in a sector of the market you are
unfamiliar with (Kavagna, 2018).
Safaricom may make investments in cutting-edge technologies like 5G, the Internet of Things (IoT), and
Artificial Intelligence (AI) in order to obtain a competitive edge via diversity. By doing this, Safaricom can
distinguish itself from its rivals and position itself as a technological leader. To further diversify its revenue
sources, Safaricom might also engage in new business models like cloud computing, digital advertising, and
e-commerce.
Reference list

1. Barrington, R. (2021) What is a pestel analysis?, Oxford College of Marketing Blog. Available at:
https://blog.oxfordcollegeofmarketing.com/2016/06/30/pestel-analysis/ (Accessed: May 5, 2023).
2. Kavagna, C. (2018) Ansoff matrix: Definition, strategies and how to use. Available at:
https://www.indeed.com/career-advice/career-development/ansoff-matrix (Accessed: May 5, 2023).
3. MacAllister, R. (2019) How to use the 5 M's of marketing to review internal resources, Oxford
College of Marketing Blog. Available at:
https://blog.oxfordcollegeofmarketing.com/2018/06/25/how-to-use-the-5-ms-of-marketing-to-
review-internal-resources/#:~:text=The%20five%20elements%20need%20to,)%20and%20Money
%20(Finances). (Accessed: May 5, 2023).
4. Vaydia, D. (2023) Economic system, WallStreetMojo. Available at:
https://www.wallstreetmojo.com/economic-system/#h-what-is-an-economic-system (Accessed: May
5, 2023).