Disruptive Innovations and Sustainable Competitive Advantage of Telecommunication Firms in Kenya: A Case of Airtel Kenya Ltd

Abstract

Recent statistics by the Communication Authority (CA) indicate that for the last five years, Airtel has lost an estimated 40% of market share to Safaricom Plc (CA, 2022). This puts long term viability and competitive edge of Airtel in doubt thus creating problem of sustainable competitive edge. Therefore, the purpose of this study is to establish the effect of disruptive innovations on sustainable competitive advantage of Airtel Kenya. The study was guided by the following specific objectives: to establish disruptive innovations practiced at Airtel Kenya; to assess sustainable competitive advantage of Airtel Kenya Ltd and to analyze the effect of disruptive innovations of sustainable competitive advantage of Airtel Ltd in Nairobi, Kenya. The Resource-Based View, Diffusion of Innovation Theory as well as the Schumpeterian Theory were used to underpin the study. Descriptive survey design was adopted targeting 230 staff from the sales and marketing as well as information and communication technology (ICT) departments at Airtel Kenya. Stratified random sampling was adopted to sample 146 respondents. Primary data was collected with aid of structured questionnaire that had undergone pretesting to determine reliability. While experts and supervisors helped to determine content and construct validity, Cronbacah Alpha computed from pre-test study data was used to determine reliability with the value 0.7 as the threshold. The findings were analyzed through SPSS guided by frequencies and percentages as well as multiple regression analysis and presented using tables and figures. The findings on the first objective indicate that disruption innovation at Airtel Kenya was practiced in varying magnitude ranging from new market disruptive innovation followed by high end disruptive innovation and lastly low-end innovation. On the second objective, while of the respondents believed that there was stability of the market share, believed that the profit trend of Airtel Kenya had been stable. The finding on the third objective indicate that at 5% level of significance, low end disruptive innovations exerted the greatest positive and significant effect on sustainable competitive advantage of Airtel Kenya followed by high end disruptive innovations and lastly new market disruptive innovations. The study concluded that disruptive innovation was practiced at Airtel Kenya in varied magnitudes and it significantly predicted its sustainable competitive advantage. The study recommended that strategy and innovation managers working at Airtel Kenya should divert more resources in low end and high-end disruptive innovation as compared to new market disruption in order to achieve long term competitive edge and leverage its products like Airtel Money to increase its uptake especially among the bottom of the market customers.