Abstract: Market entry strategies have been known to increase sales, brand awareness and business stability in various industries across the world. The success and sustainability of any organization in a competitive environment may be determined by its market entry strategy. This entails a planned method of delivering goods and services to a new market and distributing them there. The challenges of the business environment in the 1990s, characterized by fragmented markets, increased competition, rapid technological changes, shifting regulatory frameworks, and a growing dependence on non-price competition have forced many businesses to more closely scrutinize their competitive strategy. The increased competition has been further fueled by communication and liberalization of the major world economies. This has reduced the world into a global village as far as business transactions are concerned. As a result, organizations are facing stiff competition from both local and foreign competitors. In order to compete and survive in the competitive environment, different organizations are adopting different strategies, including but not limited to venturing into foreign markets. The telecommunication industry is no exception. The choice of market entry strategies is now a dominant driver that shapes the landscape of how these firms compete on the basis of costs and risks involved. A well-developed market entry strategy coupled with proper execution will result in the organization’s success. Therefore, the objective of this study was to examine the relationship between strategic market entry practices and financial performance of telecommunication firms in Kenya. The population of interest for this study was 290 top level employees of the three telecommunication firms in Kenya, namely Safaricom, Airtel and Telkom. A sample of 145 employees was randomly selected to participate in this study after applying 50% criterion in selection. The study used a mixed research design, which allowed for both quantitative and qualitative data capture. Primary data was collected through questionnaires. Descriptive statistics such as, mean, frequencies and inferential statistics (regression and correlation analysis) were used to analyze data. The study recommends that the management of telecommunication firms in Kenya should have a paradigm shift towards the spirited entry into unexplored markets as it pays to be a pioneer in the market. The benefits of a spirited entry into unexplored markets seem to outweigh the disadvantages. This therefore means that the sooner the entry into a foreign market, the better for a firm's performance in this specific market and the sooner the entry into a specific market, the higher the probability that the pattern of market entry modes can be characterized by incrementally increasing commitment. The study also recommends it would be appropriate for the management of telecommunication firms to exploit the market entry practices when developing their strategic plan with the aim of ensuring a competitive advantage over other market competitors thus attaining superior firm performance.
Keywords: market entry strategy, financial performance and telecommunication firms.
Title: Relationship between Strategic Market Entry Practices and Financial Performance of Telecommunication Firms in Kenya
Author: Arnold Namusonge, Elegwa Mukulu, Samuel Mokaya
International Journal of Management and Commerce Innovations
ISSN 2348-7585 (Online)
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