Effect of Competitive Strategies on Market Penetration in the Telecommunication Industry in Rwanda -Case Study of Tigo Rwanda Ltd

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1 Effect of Competitive Strategies on Market Penetration in the Telecommunication Industry in Rwanda -Case Study of Tigo Rwanda Ltd Josepha Mwizerwa 1, Dr. MULYUNGI Patrick 2 and Dr. RUKIA A 3 (Master s in Business Administration, Jomo Kenyatta University of Agriculture and Technology, Kigali Campus) ABSTRACT: Strategy is an essential part of any effective business plan. By using an effective competitive strategy, a company finds its industry niche and learns about its customers. In Rwanda, the telecommunication industry has experienced rapid growth hence purpose of the study was to establish the effect of competitive strategies on market penetration in the telecommunication industry in Rwanda. The study was guided by the following objectives: To examine the effect of cost leadership strategy on operational efficiency, to investigate the effect of differentiation strategy on subscriber base and to examine the effect of market focus strategy on market sales for the mobile company. Primary data for the study was collected using structured questionnaires. Data was analyzed using content analysis as it saved time and resources. The study found the most popular competitive strategies used by Tigo to assist in penetrating the market were: cost leadership strategy, differentiation strategy and focus strategy. These strategies enabled Tigo to understand its customers needs and develop solutions that add value to their lives. The study recommends that a similar study should be conducted to investigate the effect of competitive strategies on market penetration in all the telecommunication firms in Rwanda. KEYWORDS: Competitive strategies, Telecommunication industry, Tigo, Rwanda I. INTRODUCTION Competition is neither a matter of coincidence nor bad lack as observed by Porter (1985). In fact, competition is healthy to the development of an industry. In modern economy competition gauge the extent of market liberalization, innovation and progress. The retail sector, (which include the supermarket) has portrayed a tremendous growth which serves as an important indicator to the country s growing economy (Neven & Readon, 2005). Thomson and Strickland (2002) view competitive strategy to consist of all the moves and approaches that a firm has and is taking to attract buyers, withstand competitive pressure and improve its market position. In telecommunication industry this move is especially seen through product packaging and increased hours of operation, promotion efforts (loyalty cards) and also the accessibility of the network. Those that observe competitive strategy are bound to be better performers in the industry. The intensifying competition in the telecommunication industry in Rwanda is a great challenge for strategic management. This competition has been driven by quest for better sales turnover and customer satisfaction. For any mobile service provider to succeed in competitive environment, it has to be driven by leaders who can inspire the workforce with a vision of being the best in the market. Kilavuka (2007) in her studies concluded that without core competencies, drive and commitment from management and employees sustain success in the business environment is impossible According to Thompson and Strickland (2002) Strategy is the game plan that management has for positioning the company in its chosen market arena, competing successfully, pleasing customers and achieving good business performance. Linn (2007) depicted strategy as the match between an organizations resources and skills and the environmental opportunities as well as the risks it faces and the purposes it wishes to accomplish. The purpose of strategy is to give directional cues to the organization that permit it to achieve its objectives while responding to the opportunities and threats in the environment (Pearce and Robinson, 2001).Johnson and Scholes (2000) define strategy as the direction and scope of an organization over a long term which achieves advantage for the organization through its configuration of resources within a challenging environment with an aim to meet the needs of market and fulfill stakeholders expectations and is often stated explicitly in the organization mission statement. The formulation of a sound strategy facilitates number of actions and desired results that would be difficult otherwise. A strategic plan when communicated with all members of an organization, provide employees with clear vision of what the purpose and objectives of the firm are. The formulation of strategy forces the organization to examine the prospect of change in the foreseeable future and prepare for change rather than wait passively until market forces compel it. Page 93

2 A company that has well formulated competitive strategy more often than not is able to enjoy competitive advantage and according to Thomson and Strickland (1992) A company has competitive advantage whenever it has an edge over its rivals in securing customers and defending competitive forces. Sustainable competitive advantage is born out of core competencies that yield long term benefit to company. Prahalad and Hamel (1990) define core competence as an area of specialized expertise that is the result of harmonizing complex streams of technology and work activity. Statement of the Problem According Rwanda Utilities Regulatory Authority in their report; Statistics and Tariff Information in Telecom Sector as Of December 2017, there was an increase of 1.3% in the subscriber base and Mobile telephone penetration rate rose to 76.5% as compared to 75.5% recorded at the end of November 2017.Rwanda Mobile market penetration of 76.5% as at the end of December 2017 was still below the regional highest telephone penetration rate of 80%. Different types of strategies have been adopted by the various telecommunication companies in Rwanda in order to be increase their subscriber bases, competitiveness and profitability. All these strategies are directed to attract, retain and maintain customers for continuous profitability. However, majority of the telecommunication companies in Rwanda hardly measure the impact of the strategy adopted on their existing customers, new customers and effect on the mobile penetration. The research proposal seeks to explore the effects of different strategies applied by Tigo Rwanda and their impact on market penetration and subscriber base numbers by attracting new customers, improved customer satisfaction, retention, loyalty, improved operational efficiency and market sales. Objectives of the study The main objective of the study was to investigate the effect of competitive strategies adopted by Tigo in Rwanda on market penetration. Specific Objectives To examine the effect of cost leadership strategy on operational efficiency To investigate the effect of differentiation strategy on subscriber base; To examine the effect of market focus strategy and market sales for the mobile company; Research Questions What is the effect of cost leadership strategy on operational efficiency? What is the effect of differentiation strategy on subscriber base? What is the effect of market focus strategy on market sales for the mobile company? Scope of the study Geographically the focus of this study was carried out in Tigo Rwanda Limited with an aim of investigating the effect of competitive strategies adopted by telecommunications companies in Rwanda and market penetration. II. REVIEW OF RELATED LITERATURE This chapter provides theoretical framework upon which the study is based. Theoretical foundations of the study and competitive advantage have been discussed. The chapter also explores porter generic strategy and the challenges encountered in implementing competitive advantage strategy. Resource Based View of Competitive Advantage theory According to the Resource Based View competitive advantage (RBV), organizations resources can create competitive advantage. Barney (1991) argues that resources are the tangible and intangible assets that a firm control and that it can use to conceive, develop and implement its strategies. The theories argument is hence that if all firms in a market have the same stock of resources, any strategy available to a particular firm also available to other players in the market. Although a competitive advantage has the ability to become sustainable over time, this is not always necessarily the case. A competing firm can enter the market with a resource that has the ability to annul the prior firm's competitive advantage resulting in reduced revenues or profits Barney (1991). Sustainability in the context of a sustainable competitive advantage is independent factor with regard to the time frame. A competitive advantage is sustainable when the efforts by competitors to render the competitive advantage redundant have stopped (Lipman & Rumelt, When the copied actions have come 12 to an end without affecting the firm s competitive advantage, the firm s strategy can then be referred to as sustainable. This is in contrast to views of Porter (1985) that a competitive advantage is sustained only when it provides above-average returns in the long run. The difference between the RBV of the firm and dynamic capabilities view is that the latter focuses more on surviving current market conditions rather than achievement of sustainable competitive advantage which appears to be closer to contemporary business realities. There has been an emphasis for firms to focus on the actual process of dynamic capability building rather than generate further standalone definitions of dynamic capabilities. It is of key importance to focus on different industry contexts to further advance this emerging area of research. In many industries, changing the entire resource base in response to external changes is simply unrealistic. At the same time, ignoring external change altogether is Page 94

3 not an alternative since companies would crumble under the weight of competition. Senior managers are therefore forced to engage with the complex task of dynamic capability building in order to facilitate competitive survival in the light of depreciating value of resource bases available within the firm. Simply put, Barney holds that firms compete on the basis of their resources and capabilities; hence the RBV theory takes an inward-looking approach to analysis of competitive advantage Michael Porter s perspective of competitive advantage Porter s model of competitive advantage is about taking offensive and defensive action to create defendable position in an industry in order to generate a superior return on investment. This theory holds that a firm is able to deliver the same benefits as competition but at a lower cost (cost advantage) or deliver benefits that exceed those of competing products (differential advantage). Cost advantage is achieved through economies of scale, increased efficiencies due to technological investments, mass distribution among others. Differentiation advantage is achieved through development of unique offering that is targeted at high end customers who are not sensitive to price instead value quality and uniqueness. Porter s recipes for achieving competitive advantage are highly prescriptive. He asserts that firms can achieve competitive advantage through either cost leadership or differentiation, and he advises firms to avoid being stuck in the middle (Porter, 1985). Competitive strategies Competition is a key feature in any vibrant economy. Competition is critical to success or failure of the firm. It determines the appropriateness of firm activities that can contribute to its performance such as innovation, cohesive culture or good implementation. Competitive strategy is thus the search for a favorable competitive position in an industry, the fundamental arena in which competition occurs. Competitive strategy involves position of a business to maximize the value of capabilities that distinguish it from competitors. Competitive strategy aims at establishing a profitable and sustainable position against the forces that determine industry competition (Porter 1998). Customers want services quicker, cheaper and they want them their way. Thompson and Strickland (2002) laid emphasis on this by saying that, there are as many competitive strategies as there are competitors. However, beneath the subtitles and superficial differences, there are impressive similarities between different competitive strategies when one considers a company s market target and type of competitive advantage the company is trying to achieve Porters generic strategies. The cores of company s competitive strategy consist of its internal initiatives to deliver superior value to customers. But it also includes defensive and offensive moves to counter the maneuvering of rivals, actions to shift resources around to improve the firms long-term competitive capabilities and market position and tactical efforts to respond to whatever market conditions that prevail at the moment (Thompson and Strickland 2003). Conceptual Framework Independent variables Dependent variables COMPETITIVE STRATEGIES Cost Leadership Strategy Differentiation Strategy Focus Strategy MARKET PENETRATION Operation Efficiency Subscriber base Market Sales Figure 2.1: Conceptual framework Cost Leadership Strategy Cost leadership strategy is a strategy that entails striving to be the overall low-cost provider of a product or service that appeal to a broad range of customers. For an effective cost leadership, a firm must have a large market share (Hyatt, 2001). A firm strives to have the lowest cost in the industry and offers its products and services to a broad market at the lowest prices. A cost leader basis for competitive advantage is lower overall costs than competitors. Successful leaders are exceptionally good at finding ways to drive cost out of their business. Cost leadership strategy focuses on gaining competitive advantage by having the lowest cost and cost structure. In the industry (porter, 1985) in order to achieve a low-cost advantage an organization must have a low-cost leadership mind-set. Low cost manufacturing with rapid distribution and replenishment and a workforce committed to the low-cost strategy. The firm sells its products at either average industry price to earn a profit higher than that of rivals or price lower than the average industry price to gain market share. Ways to achieve cost leadership are mass production, mass distribution, economies of scale, technology, product design, capacity utilization of resources and raw materials. Cost leaders work to have the lowest product or service unit cost and can withstand competition with their lower cost structure. Page 95

4 Contrary to the previous thought that firms lost revenue to attain cost leadership, Porter (1987) indicated that firms do not have to sacrifice revenue to be the cost leader since high revenue is achieved through obtaining a large market share. As a low-cost leader, an organization can present barriers against new market entrants who would need large amounts of capital to enter the market (Hyatt, 2001). Differentiation Strategy Differentiation strategy is defined as positioning a brand in such a way as to differentiate it from the competition and establish an image that is unique. Differentiation will create benefits and dominant positions that will last until competitors imitate a firm s key resources and will be restored through the creation of new opportunities that result in a new competitive advantage and new entry barriers. Differentiation strategy are marketing techniques used by firms to establish strong indent in a specific market; also called segmentation strategy. Using differentiation, a firm will introduce different varieties of the same product under the same name into a particular product category and thus cover the range of products in that category. Differentiation can be based on the product itself, the delivery system, and a broad range of other factors. With this differentiation features firms provide additional values to customers which reward them with a premium price. Differentiation strategy calls for development of a product or service that offers unique attributes that are valued by customers and that customers perceive to be better than or different from the products of the competitor. The uniqueness should also translate to profit margins that are higher than those of competitors. This is because customers who buy differentiated products are willing to pay more for the product. Differentiated products mainly appeal to the knowledgeable customers. Successful differentiation is based on the study of buyers need and behaviour in order to learn what they consider important and valuable. A product can be differentiated in various ways. Unusual features, responsive customer service, rapid product innovations and technological leadership, perceived prestige and status, different tastes and engineering design and performance are examples of approaches to differentiation (Porter, 1985). Focus or Niche Strategy As` Porter (1998) noted, in focus strategy, a firm targets a specific segment of the market. Focus strategy entails directing resources on a select few niche target market. By focusing the marketing mix on the narrowly defined market the business can position itself to increase brand loyalty and customer satisfaction thus shielding itself from the perils of the minimum price maintenance agreement and effects of the impact of potentially increasing costs. Focus aim at growing the market share through operating in narrow markets or niche markets that are overlooked by the larger competitors. These niches arise from number of factors including geography, buyer characteristics, and product specifications. New entrants in the market may use penetration pricing which involve setting the price low in order to attract customers and gain market share. The price will be raised later once the market share is gained. A successful focus strategy depends upon an industry segment large enough to have good growth potential but small enough not to be vital to other major competitors. This strategy is not a separate strategy per se, bit describes the scope over which a company should compete based on cost or differentiation. Midsize and large firms use focus-based strategies but only in conjunction with differentiation or cost leadership generic strategies coupled with promotion strategies. The practice of promoting products on sale can accomplish both short term and long- term objectives. Short run objectives include creating product awareness and interest, increasing store traffic and sales, reducing inventory, and enhancing perception of savings and value. Long run objectives include establishing a specific price image for the advertiser to achieve a competitive positioning and customer loyalty and thus attainment of desired market share. Competitive Advantage There are many routes to competitive advantage, but the most basic is to provide buyers with what they perceive to be of superior value at a lower price, a superior service that is worth paying more for or a best value offering that represents an attractive combination of price, features, quality, service and other attributes that buyers find attractive. (Thompson & Strickland, 2003). Competitive advantage is attained when a company moves into a position where it has an edge in coping with competitive forces and attracting customers, (Porter 1985). Competitive edge is said to include increased quality of a service or product in the market, offering of superior customer service in comparison to the competitors, having a product that does the best job in performing a particular function and offering the most value for money in terms of a combination of good quality, good service and acceptable price. In today s intensely competitive global economy, speed or rapid response to customer request or market and technological change is currently considered a major source of competitive advantage for numerous firm; supermarkets included (Pearce and Robison, 2001). When an organization management is able to view the environment as dynamic and therefore implement the needed changes then they are able to rapidly grow. Page 96

5 With reference to Wickham (2006), competitive advantage can be put into the following five categories: product advantage, knowledge advantage, cost advantage, relationship advantage and structural advantage. An enterprise will gain product advantage if it is able to create a superior product value higher than competitors (Wickham 2006). For those in the service sector this is considered service advantage. An enterprise will gain cost advantage if its cumulative cost is lower than competitors (Porter 1985).; Wickham 2006). There are three types of knowledge that support a company to gain advantage over competitors: product knowledge, market knowledge and technical knowledge. In addition, a company will gain competitive advantage if it has patents or other intellectual property which prevent competitors from replicating. Companies that rapidly adopt their products or services in a way that benefits their customers or create new customers tend to enjoy a major competitive advantage over their rivals that are unable to do so. Firms compete for markets and resources and their competitive position is reflected in either market shares or in the creation and accumulation rate of comparative advantages, like innovative products, processes, etc. Enterprise competitiveness depends both on its performance and the direct entrepreneurial environment in which it operates and acts. The entrepreneurial competencies exhibited may make the much-needed thrust for competitive advantage (Morris et al. 2008). To develop and sustain competitive advantage, enterprises must understand the resources of such advantages and utilize them efficiently. Challenges in Implementing Competitive Strategies The implementation of strategies may be hindered by competitive challenges which reduce the effective utilization of strategies developed. The challenges identified are financial requirements, government and industry imposed regulatory issues, and the ability of the firm owners and managers. Challenges faced by firms when implanting strategies include availability of financial resources, staff skills, marketing abilities, changing customer needs, changing external environment, government regulation and the ability to coordinate all the firm s activities in pursuit of the agreed strategy The major challenge with cost leadership is the ability of the competitor to produce the similar product at a lower cost. The major challenge with differentiation strategy is the firm s ability to maintain the perceived uniqueness. Competitors may imitate and copy the product thus eroding its uniqueness held by the firm. Another risk lies with the cost differential between low cost competitors and the differentiated firm. A major challenge with the focus niche is that it can easily be eroded by technological changes and changes in customer tastes. Once focused to one niche it is not easy to move to the other niches. III. RESEARCH METHODOLOGY Introduction This chapter consists of the research methodology that was used in the study. This includes the research design, data collection method, and research instruments and data analysis. The chapter will also look at the data analysis techniques to be used in analyzing the data that was be collected. Research Design Descriptive research design was being used and this includes facts finding inquiries of different kinds the purpose being to describe state of affairs as it exists at present (Kothari, 2005). It included case studies, surveys and questionnaires. Data collection This research relied on primary and secondary data, Primary data is qualitative in nature and was filled by the employees of Tigo Rwanda Ltd and was collected using questionnaires. The questionnaires were addressed to 8 employees from the following departments: Corporate service and customer operation department, Marketing department and Distribution center department. Each respondent was asked to respond to the best of their knowledge. Secondary data was collected by use of desk research from published report and other documents. Data Analysis Data was analyzed using content analysis. Content analysis examines the intensity with which certain words have been used. It is a technique for making inferences by systematically and objectively identifying specified characteristics of messages and using the same to relate to trends Sources of Data A source is one of the materials the researcher will use for collecting information during the investigation. The sources of data are both primary and secondary. Primary data refers also to data collected to solve the specific problems or issues under investigation. Secondary data are research reports that use primary data to solve research problems written, scholarly and professional audiences Page 97

6 IV. RESEARCH FINDINGS AND DISCUSSION Demographics With regard to the ownership structure of Tigo Limited, the findings revealed that the company is a subsidiary of Millicom, a Swedish company dedicated to investing in Rwanda's digital innovation space. It launched in December 2009 and are today, the second largest telecommunication company in Rwanda with over two million subscribers. It was Millicom s first African operation to launch 3G Internet for our subscribers, extending digital inclusion to thousands of Rwandans. The findings also revealed that Tigo Limited had been in operation for a period of nine years which was considered long enough for the firm to have implemented competitive strategies. The individuals agreed that the products and services offered by Tigo Limited are as follows: Voice calls and text messages, Tigo cash services, text messages, data and internet services. Further, the respondents indicated that Tigo should address competition using a number of strategies mainly cost leadership strategy, differentiation strategy and focus strategy. The respondents agreed that these strategies were the most appropriate in accommodating the changing needs of the customer and improving efficiency of the firm. These findings conform to explanations by Porter (2004) on competitive strategies. He argued that strategies are business approaches and initiatives it under takes to attract customers and fulfill their expectations, to withstand competitive pressures and to strengthen its market position. These strategies provide opportunities for the organization to respond to the various challenges within its operating environment. Tigo Limited adopted these strategies to seize strategic initiatives and maintain a competitive edge in the market. Porter (2008) further argues that the organization s competitive aim is to delight in her customers since its success is determined by its responsiveness to the customer needs thus enabling the organization to earn a competitive advantage and outsmart rivals in the market place. Competitive Strategies used by Tigo to assist in Market penetration The respondents unanimously agreed that Tigo Limited adopted formal strategies for achieving its strategic objectives. According to the respondents this was intended to enhance allocation of resources to support the chosen strategies. These findings are in line with the recommendations given by Pearce and Robinson (2005), that to succeed in strategy implementation the organization should allocate adequate resources. He further argues that to successfully deal with strategy implementation, then organization should allocate adequate resources for instance time to ensure successful strategy implementation. The process of implementation requires discipline, planning, and motivation; the top and lower level management must work together towards realizing goals and objectives. The firm s management should create adequate time in explaining the importance of strategy implementation to the employees to ensure that they understand its importance. The respondents agreed that top management was in change of strategy implementation, human resources, and administration, planning and enterprise business solutions. Top leadership motivated and inspired their subjects through steering the organization to undertake changes which are necessary in strategy implementation. The top-level management cultivated team spirit and acted as a vehicle in strategy implementation process. The respondents agreed that most middle level managers needed to team up with top managers in implementing strategy. These findings are consistent with the observations of Ray, Barney and Muhanna (2004) who explained that to deliberate on strategy implementation, the middle level managers must be fully involved in strategy implementation. Managers form part of the strategy implementation process since their motivation towards a successful implementation increase since they see themselves as an important part of the implementation process. The organization should adapt a flexible organizational structure that can effectively accommodate the changes in the environment. The set goals and objectives should be compatible with the strategy in place. Some of the strategy implementation instruments include the balance score card which is a popular and prevalent management system that considers financial as well as non-financial measures. It provides a functionality to translate a company s strategic objectives into coherent set of performance measures The respondents agreed that competitive strategies were geared towards enabling Tigo Limited to gain a competitive edge against their competitors. Most market players in the Telecommunication industry offered the same products and services. Most of the competitive strategies adopted by Tigo focused on utilizing its core competence to make it difficult for its competitors to imitate because they relate to the management of linkages within the organizations value chain and to linkages into the supply and distribution chains. The respondents unanimously agreed that Tigo compete head on for market share in the Telecommunications industry. It was observed that competition was an increasingly important theme in the Telecommunications industry which was credited with offering flexible and differentiated products, lowering prices for goods and services and stimulating innovations. The respondents indicated that the nature of competition that faced Tigo was threat of entry, bargaining power of suppliers and bargaining power of buyers and threat of substitution and intensity of rivalry. However, according to findings Tigo adopted specific strategies to counter this kind of competition these are: Page 98

7 differentiation strategy, creation of unique products and services, adoption of low product prices, advertisement, cost and focus strategy. The respondents indicated that competitive strategies adopted by Tigo contributed towards achieving a competitive advantage in a number of ways for instance access to natural resources, highly skilled personnel, high entry barriers and product innovations. Further the findings observed that through adoption of competitive strategies the firm was able to achieve capabilities utilization. This is achieved by identifying core competencies the firm is able to focus on areas that give them an advantage over their competitors (Pearce &Robinson, 2005). Core competences are more robust and difficult to imitate. Differentiation is one of the strategies that enable Tigo Limited to gain competitiveness in the market. The findings observed that this was achieved through products and service differentiation which involved innovation of products and services to ensure that they appear different from those of competitors and thus enhancing competitive advantage against its competitors. These findings are consistent with the arguments by Pearce and Robinson (2005) who indicated that firms that utilize product differentiation produce products at competitive costs to reproduce upward pressure on the price that customers pay. When products differentiated features are produced at non-competitive costs, the price for the product can exceed what the firm s target customers are willing to pay. When the firm has a thorough understanding of what its target customers value, the relative importance they attach to the satisfaction of different needs, and for what they are willing to pay a premium, the differentiation strategy can be successful. Through the differentiation strategy Tigo limited is able to produce non-standardized that is unique products for customers who value differentiated features more than they value low cost. The respondents indicated that the strategies used by Tigo influence effective utilization of resources in achieving superior performance over its competitors. This was realized through allocating sufficient resources to enhance their implementation in order to achieve strategic goals and objectives. This also gave Tigo a platform to improved flexibility and market penetration. The findings also revealed that competitive advantage influenced Tigo in achieving market leadership in the Telecommunication industry. The respondents argued that through access to raw materials of modern technologies for example information communication technology (ICT) enabled Tigo to lower its prices which increases the level of demand and hence increased market share. The respondents agreed that Tigo used cost leadership strategy to sell standardized goods and services but with competitive levels of differentiation to the industry s most typical customers. This was achieved in line with the process innovations which are newly designed production and distribution methods and techniques. This enabled Tigo Limited to operate more efficiently. The findings further revealed that Tigo implemented business strategies which led to achievement of a high market share. The findings observed that focus strategy led to targeting specific market segments. Cost strategy was also used by Tigo in minimizing the cost of operations through improved efficiency in operations. The respondents agreed that advertising strategy was one of the most popular business strategy that was intended to target the audience by communicating to them directly about a product and the benefits of using it. The respondents further observed that creation of unique products and services that target unique needs of the customers in a more flexible and cost-effective means. Influence of Competitive Strategies on the Market penetration The respondents were asked to indicate the role of competitive advantage in enhancing the market share of Tigo; the respondents unanimously agreed that competitive strategy was seen as an essential tool for enhancing the market share. They agreed that through competitive strategies enabled the firm to increase sales through attracting more customers and retaining existing ones. When asked whether competitive strategies contribute to increased sales turnover, two of the respondents agreed that competitive strategy was a process whereby a firm s portfolio of products and services was designed to bring together its unique resources and capabilities to gain a competitive advantage in the market place. Success implementation of competitive strategies led to improved efficiency, operational excellence which was intended to achieve cost leadership. Through efficient processes and procedures, the study found that Tigo had streamlined its operations which significantly minimized costs this led to high volume of transactions and standardized production of goods and services. The respondents unanimously agreed that competitive strategy used by Tigo was an essential tool in enhancing market penetration and thus high profits, increased sales and improved customer satisfaction. It was also revealed that cost reduction, innovation and quality improvement created strong barriers to entry, through customers captivity, lower production costs or economies of scale, Tigo was able to maintain and sustain these advantages. The respondents argued that the firm used its competitive advantage to build a good corporate image in terms of distinctiveness and uniqueness in terms of providing value adding goods and services that are reliable and accessible. Page 99

8 The findings further observed that through focus strategy, Tigo had created a market segmentation which focused on selecting customer groups, product range, geographical area or service line. Through cost leadership strategy Tigo was able to streamline its operations in a manner that led to reduced costs. This made the company to be seen as a brand in terms of flexibility, accessibility and convenience. V. SUMMARY, CONCLUSION AND RECOMMENDATIONS Summary of Findings The findings revealed that Tigo had been in operation for a period of eight years which was considered long enough for the firm to have implemented competitive strategies. The respondents agreed that adopting competitive strategies was the most appropriate way of countering competition in the Telecommunication industry. The respondents agreed that differentiation strategy, cost leadership, focus strategy, product choice strategy, market penetration strategy and pricing strategies were the most popularly used by Tigo limited. These findings are consistent with Porter (2008) who argue that the organization s competitive aim is to delight in her customers since its success is determined by its responsiveness to the customer needs thus enabling the organization to earn a competitive advantage and outsmart rivals in the market place. Tigo Limited adopted formal strategies for achieving its strategic objectives. According to the respondents, this was intended to enhance allocation of resources to support the chosen strategies. The top management was in charge of strategy implementation, human resources, and administration, planning and enterprise business solutions. The top management motivated and inspired their subjects through steering the organization to undertake changes which are necessary in strategy implementation. This cultivated team spirit and acted as a vehicle in strategy implementation process. The respondents agreed that most middle level managers needed to team up with top managers in implementing strategy. Competitive strategies were geared towards enabling Tigo Limited to gain a competitive edge against their competitors. The respondents unanimously agreed that Tigo compete head on for market share in the Telecommunications industry. It was observed that competition was an increasingly important theme in the Telecommunications firm industry which was credited with offering flexible and differentiated products, lowering prices for goods and services and stimulating innovations. Differentiation is one of the strategies that enable Tigo Limited to gain competitiveness in the market. This was achieved through products and service differentiation which involved innovation of products and services to ensure that they appear different from those of competitors and thus enhancing competitive advantage against its competitors. Through the differentiation strategy Tigo limited is able to produce nonstandardized that is unique products for customers who value differentiated features more than they value low cost The findings observed that focus strategy led to targeting specific market segments. Cost strategy was also used by Tigo in minimizing the cost of operations through improved efficiency in operations. The respondents agreed that advertising strategy was one of the most popular business strategy that was intended to target the audience by communicating to them directly about a product and the benefits of using it. The respondents further observed that creation of unique products and services that target unique needs of the customers in a more flexible and cost-effective means. Through efficient processes and procedures, the study found that Tigo had streamlined its operations which significantly minimized costs this led to high volume of transactions and standardized production of goods and services. The respondents unanimously agreed that competitive strategy used by Tigo was an essential tool in enhancing market penetration and thus high profits, increased sales and improved customer satisfaction. It was also revealed that cost reduction, innovation and quality improvement created strong barriers to entry, through customers captivity, lower production costs or economies of scale, Tigo was able to maintain and sustain these advantages. The respondents argued that the firm used its competitive advantage to build a good corporate image in terms of distinctiveness and uniqueness in terms of providing value adding goods and services that are reliable and accessible. Through focus strategy, Tigo had created a market segmentation which focused on selecting customer groups, product range, geographical area or service line. Through cost leadership strategy Tigo was able to streamline its operations in a manner that led to reduced costs. This made the company to be seen as a brand in terms of flexibility, accessibility and convenience. Conclusion The study concludes that the most popular competitive strategies used by Tigo to boost its market share are as follows: cost leadership strategy, differentiation strategy and market focus strategy. It was revealed that these strategies enabled Tigo limited to understand its customers needs and develop and solutions that add value to their lives. The findings also observed that due to adoption of modern technologies Tigo was able to provide integrated information communication technology (ICT) solutions that created a platform to integrate their Page 100

9 customers and thus increase access to their products and services. This attracted more customers which resulted to increased sales and market share. Recommendations The study recommends that a similar study should be conducted to investigate the influence of competitive strategies on the firm s market share in all the telecommunication firms in Rwanda. This will give more detailed findings which will lead to more reliable and accurate conclusion that is based on solid facts. VI. REFERENCES [1] Barney, J. (1991); Firms Resources and Sustained Competitive Advantage, Journal of management, 17(1) pp [2] Hyatt,L. (2001). A simple Guide to Strategy, Nursing Homes, Vol.50 No.1, pp [3] Johnson and Scoles, K (2000); Exploring Corporate Strategy. India: Prentice hall. [4] Kay, J. (1993): Foundations of Corporate Success. Oxford University Press. [5] Kilavuka, J. (2007); Competitive Strategies Adapted By Private Primary Schools in Nairobi. Unpublished Master of Business Administration of the University of Nairobi. [6] Kothari, C. R. (2005). Research methodology: Methods & techniques, New Delhi: New Age International (P) Ltd. [7] Linn, M. (2007); The Importance of Managing Strategically. The Bottom Line, New York. [8] Malburg, H and Waters, J. (1985); Of Strategies Deliberate and Emergent. Strategic Management Journal. 6(3), [9] Pearce,.A. & Robinson, R. (2001); Strategic Management: Strategy Formulation, Implementation and Control. Third Edition, Richard D. Irwin Inc. [10] Pearce, A. & Robinson, R. (2005); Strategic Management: Strategy Formulation, Implementation and Control. Tenth Edition, McGraw. Hill. [11] Porter, M. (1985); Competitive strategy: Techniques for Analyzing Industries and Competitors. New York: Prentice Hall. [12] Porter, M. (1998). Competitive advantage, NY: The free press. [13] Porter, M. E. (2008). The five competing forces that shape strategy, Harvard Business Review, 86 (1):78-93 [14] Prahalad C. & Hamel G.(1990); Core Competency Concept. Harvard Business Review, May June 1990, p.64. [15] Ray, G, Barney, J. B. & Muhanna, W. A. (2004). Capabilities, business processes, and competitive advantage, Strategic Management Journal, 25,1, [16] Rura.(2018, January). Active Mobile Telephone Subscriptions as of 31st December Retrieved from [17] Thomson, A., & Strickland A. S. (2002); Crafting and Executing Strategy. The quest for Competitive Advantage. New York, Irwin. [18] Thomson, A., and Strickland A. (1992); Strategic Management: Concepts and Cases (7 Ed). Boston: Irwin. [19] Thomson. A., Strickland, A. J. and Gamble, J. A (2007); Crafting and Executing Strategy: The Quest for Competitive Advantage (Concepts and Cases). New York: McGraw. Hill Irwin. [20] Wernerfelt, B. (1984). A resource-based view of the firm, Strategic Management Journal, [21] Wickham, P. (2006); Strategic Entrepreneurship.4 th Edition. Essex: Pearson Education th Page 101