THE EFFECT OF COMPETITIVE STRATEGIC ON ORGANIZATIONAL PERFORMANCE IN TELECOMMUNICATION COMPANIES IN MOGADISHU SOMALIA

This study aimed to figure of competitive strategy on organizational performance of telecommunication companies in Mogadishu-Somalia. The first objective was the impact of cost leadership strategy on organizational performance of telecommunication companies in Mogadishu-Somalia. The second objective was the impact of differentiation strategy on organizational performance of telecommunication companies in Mogadishu-Somalia. The third objective was the impact of focus on strategy on organizational performance of telecommunication companies in Mogadishu-Somalia. The target population was 100 and the sample size was 60 respondents. The study used descriptive method and 20 questionnaires were distributed . Descriptive and correlation analysis was used. The study found that cost leadership strategy, differentiation strategy and focus on strategy have significant positive relationships on organizational performance of telecommunication companies in Mogadishu-Somalia. Finally, the researcher found that the competitive strategy has significant positive relationships on organizational performance of telecommunication companies in Mogadishu-Somalia. INTRODUCTION In today‟s competitive business environment, organizations must map out their plans on how to sustain their business performance, their competitive advantage and increase their probability (Thompson, Strickland, & J.E., 2007) that the main objective of any strategy in an organization is to improve its financial performance, strengthen its competitive position and to outdo its rivals. To obtain effective firm performance within the scope of sustainable competitive advantage, decisions on shaping firms‟ competitive strategies was be one of the main issues for organizations. This is because the formulation and implementation of competitive business strategies that will improve performance are one of the competent methods to achieve firm‟s sustainable competitive advantage, therefore the effect of competitive strategies on firm performance is a major issue to policy makers and has been playing important role to refine firm performance for a long time (Porter, M. , 2008) The telecommunication industry is growing and is becoming intensely competitive. As such, every organization needs to adopt strategies which will enable it to have a competitive edge over the other players in the market. As competition intensifies, many businesses continue to seek profitable ways in which to differentiate themselves from competitors (Porter, M. , 2008). Strategies concern the purpose and objectives of the organization. They are the things that organizations do, the paths they follow and the decisions they take in order to reach certain points or level of success. Influences such as economic restructuring, intensified competition, government regulations, and technological advances have resulted in heightened environmental turbulence and uncertainty for small business firms(Covin, J., D.P; Slevin. , 2010). A competitive strategy, from a business level perspective, is the achievement of competitive advantage by a business unit in its particular market. According to (Ansoff, H.I.; McDonnell, E., 1990)competitive strategy is a distinctive approach which a firm uses or intends to use to succeed in the market. Competitive strategies as more skill-based and involving strategic thinking, innovation, execution, critical thinking, positioning and the art of warfare. Competitive strategy specifies the distinctive approach ISSN (Online): 2455-3662 EPRA International Journal of Multidisciplinary Research (IJMR) Peer Reviewed Journal Volume: 7 | Issue: 1 |January 2021|| Journal DOI: 10.36713/epra2013 || SJIF Impact Factor: 7.032 ||ISI Value: 1.188 2021 EPRA IJMR | www.eprajournals. com | Journal DOI URL: https://doi.org/10.36713/epra2013 85 which the firm intends to use in order to succeed in each of the strategic business units. Competitive strategy gives a company an advantage over its rivals in attracting customers and defending against competitive forces. Competitive strategy consequently aims to establish a profitable and sustainable position against the forces that determine industry competition (Porter, M. , 2008). Competitive strategy refers to deliberately choosing different set of activities that form the basis of competitive advantage to deliver a unique mix of value. It is a long-term action plan that is defused to help a company gain a competitive advantage over its rivals. Competitive strategy is about being different from others in the industry which means deliberately choosing a different set of activities to deliver a unique mix of value. A company has competitive advantage whenever it has an edge over its rivals in securing customers and defending against competitive forces (Thompson A; Strickland A.J., 2007). In Somalia Six main companies provide telecommunication services in the country. These include Hormuud Telecom, Telecom Somalia, Telesom, and Golis Telecom. They provides a range of products and services which include Land-line,GSM, roaming services, top-up services, data messaging, MMT, voice services, and security services, 4. -5G, GPRS and much more. These services are all geared towards growth and competition. They uses a lot of strategies to gain sustained competitive advantage (Jama. A. M., 2018) The telecommunication industry is growing and is becoming intensely competitive. As such, every organization needs to adopt strategies which will enable it to have a competitive edge over the other players in the market. As competition intensifies, many businesses continue to seek profitable ways in which to differentiate themselves from competitors (Porter, 2008). Strategies concern the purpose and objectives of the organization. They are the things that organizations do, the paths they follow and the decisions they take in order to reach certain points or level of success. Influences such as economic restructuring, intensified competition, government regulations, and technological advances have resulted in heightened environmental turbulence and uncertainty for small business firms (Covin & Slevin, 2010). A competitive strategy, from a business level perspective, is the achievement of competitive advantage by a business unit in its particular market. According to Ansoff and McDonnell (1990) competitive strategy is a distinctive approach which a firm uses or intends to use to succeed in the market. Sidorowicz (2007) views competitive strategies as more skill-based and involving strategic thinking, innovation, execution, critical thinking, positioning and the art of warfare. Competitive strategy specifies the distinctive approach which the firm intends to use in order to succeed in each of the strategic business units. Competitive strategy gives a company an advantage over its rivals in attracting customers and defending against competitive forces. Competitive strategy consequently aims to establish a profitable and sustainable position against the forces that determine industry competition (Porter, 2008). The telecommunications business in Somalia, as many other countries in the world (Daniel, 2007) has in the recent past been among the most competitive industry of the economy. The telecommunication company offers a variety of services which include Mobile service (GSM), landlines and mobile linked internet services. Studies done on competitive strategies are noted to have given attention to contexts other than Somalia and in particular the mobile telecommunications business. For example, a study by Murage (2011) focused on the competitive strategies in the petroleum industry, a study by Gathoga (2001) focused on competitive strategies by commercial banks in Kenya and Karanja (2002) studied competitive strategies within the real estate firms in the perspective of Porter‟s generic model, but there is no previous competitive strategies study conducted in telecommunication industry in Somalia. This paper examines the relationship between competitive strategies and organizational performance among firms in the mobile telecommunications industry in Somalia. Specifically the study set out to identify the competitive strategies adopted by firms in the mobile telecommunication industry in Somalia and thereafter examine the relationship between these strategies and firm performance in this industry LITERATURE REVIEW Cost Leadership Strategy on organizational performance Cost Leadership Strategy is defined as the capacity of an entity to produce products that will be at a lower cost compared to different competitors. Organizations can produce great quality products and offer them at a lower cost consequently give them an upper hand over their competitors. Lower expenses will pull in clients consequently result in higher benefits. As per this is ascribed to ease work, material and give the firm a low manufacturing cost(Porter, M. E., 1985). Cost Leadership Strategy-In cost leadership, a company sets out to become the low cost producer in its industry. The sources of cost advantage are varied and depend on the structure of the industry. They may ISSN (Online): 2455-3662 EPRA International Journal of Multidisciplinary Research (IJMR) Peer Reviewed Journal Volume: 7 | Issue: 1 |January 2021|| Journal DOI: 10.36713/epra2013 || SJIF Impact Factor: 7.032 ||ISI Value: 1.188 2021 EPRA IJMR | www.eprajournals. com | Journal DOI URL: https://doi.org/10.36713/epra2013 86 include the pursuit of economies of scale, proprietary technology, preferential access to raw materials and other factors. A low cost producer must find and exploit all sources of cost advantage. If a company can achieve and sustain overall cost leadership, then it will be an above average performer in its industry, provided it can command prices at or near the industry average. Simply being the lowest-cost producers is not good enough, as company leave itself wide open to attack by other low-cost producers who may undercut its pric