Expansion strategy and performance of telecommunication companies in Puntland state of Somalia

Abstract

The telecommunication industry is an important sector and significantly contributes to growth of Somalia’s economy. However, telecommunication companies in Puntland state of Somalia are confronted with several challenges that affect their continued growth and performance. While expansion strategies have been known to be fundamental in enhancing organizational performance, there lacks adequate empirical backing in the context of telecommunication industry in Somalia. It is on this merit that the study sought to examine the role played by expansion strategies in performance of telecommunication companies in Puntland Somalia. Specifically, th study was sought to found out the influence of market penetration strategy on performance of Telecommunication companies in Puntland state of Somalia. to assess the effect of market development strategy on performance telecommunication Companies in Puntland of Somalia, to determine the role of product development strategy on performance of Telecommunication Companies in Puntland state of Somalia, and to evaluate the effect of diversification strategy on performance of Telecommunication Companies in Puntland state of Somalia. The study was anchored on Porter’s five forces model, resource based view and market based view. The study was employed a descriptive research design and were targeted135 managers drawn from the main telecommunication companies in Puntland State. Used a census, the study was a sample of 135 respondents, and they were surveyed using a structured questionnaire. The questionnaire was administered using both physical method and online method after successfully being pilot tested to enhance its reliability and validity. The collected data was analyzed using descriptive and inferential statistics. The descriptive statistics were included mean, standard deviation, percentages and frequencies. Inferential statistics were included the Analysis of Variance, Correlation coefficients, P-values and Beta coefficients. These were sought to establish the statistical relationship between independent variables and dependent variable. The Study found that expansion strategies including market penetration strategy, market development strategy product development strategy diversification strategy has positive significant role on performance of telecommunication Companies in Puntland state of Somalia. From the findings, the study concluded that diversification strategy has the highest role on performance of telecommunication companies in Puntland Somalia, followed by market development strategy, followed by product development strategy while market development having the lowest effect on performance of telecommunication companies. Thestudy recommended that the telecommunication companies in Puntland state of Somalia should enhance market penetration activities moreover the study recommended the management of Somtel telecommunication company to increase the advertising expenditure, penetration strategies lowering price, distributing, developing network of retailers, customer product use training, and promotion. The study recommends that telecommunication companies in Puntland state of Somalia reach out more customers by being innovative by their advertising mode. Emphasis should be put on social media television and radio to attract more. This study was examined the role of expansion strategy on performance of telecommunication Companies in Puntland state of Somalia. Therefore, this study suggests that future studies could be conducted in dissimilar industries countries and methodologies.