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Relationship Between Strategic Product Development Practices and Financial Performance of Telecommunication Firms in Kenya

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  • Arnold Namusonge
  • Elegwa Mukulu
  • Samuel Mokaya

Abstract

Product development is a crucial factor that determines success or failure of firms in the telecommunication industry. The success and sustainability of any organization in a competitive environment is determined by its product development strategy. The highly competitive nature of the telecommunication sector as well as globalization of markets has made it increasingly difficult for firms to differentiate their products on the basis of cost and quality. On the other hand, new product development is now a dominant driver that shapes the landscape of how these firms compete, with the possibility of new product failure also being high. It is therefore necessary for telecommunication firms to master the product development strategies that scale up their product and service portfolios that are likely to capture a wider market and therefore make more profits. Therefore, the objective of this study was to examine the relationship between strategic product development strategies 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 should simultaneously scale up their product attributes to fit customers’ needs and minimize time to market if they are to compete in the ever growing market. This will give them competitive edge over other market competitors therefore attaining superior firm performance.

Suggested Citation

  • Arnold Namusonge & Elegwa Mukulu & Samuel Mokaya, 2017. "Relationship Between Strategic Product Development Practices and Financial Performance of Telecommunication Firms in Kenya," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 7(11), pages 309-326, November.
    • Handle: RePEc:hur:ijarbs:v:7:y:2017:i:11:p:309-326
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    References listed on IDEAS

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    1. Martínez, Diego & Rodríguez, Jesús & Torres, José L., 2010. "ICT-specific technological change and productivity growth in the US: 1980-2004," Information Economics and Policy, Elsevier, vol. 22(2), pages 121-129, May.
    2. Lee Cronbach, 1951. "Coefficient alpha and the internal structure of tests," Psychometrika, Springer;The Psychometric Society, vol. 16(3), pages 297-334, September.
    3. Hee‐Jae Cho & Vladimir Pucik, 2005. "Relationship between innovativeness, quality, growth, profitability, and market value," Strategic Management Journal, Wiley Blackwell, vol. 26(6), pages 555-575, June.
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    1. Iheanachor, Nkemdilim & Umukoro, Immanuel Ovemeso & David-West, Olayinka, 2021. "The role of product development practices on new product performance: Evidence from Nigeria's financial services providers," Technological Forecasting and Social Change, Elsevier, vol. 164(C).

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