Pestal Analysis of Safaricom Ltd Essay examples

7310 Words Nov 12th, 2010 30 Pages
PESTEL ANALYSIS OF SAFARICOM LIMITED
INTRODUCTION
Company Background
Safaricom Limited is Kenya's current leading Mobile Telephone Operator. It prides itself in providing world class GSM (Global System for Mobile Communications) service to over 16 million subscribers in Kenya. The company was formed in 1997 as a fully owned subsidiary of Telkom Kenya. In May 2000, Vodafone group Plc, the world’s largest Telecommunication company acquired a 40% stake and management responsibility for the company. Safaricom's aim is to remain the leading Mobile Network Operator in Kenya and has the ambition to become the best company in Africa. In order to achieve this, a strong focus has been placed on quality of service to its customers. Safaricom
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Under each frame/point, there are key components which will be considered in the discussion. The points will be discussed as they are on the ground, how they affect Safaricom as a company and what opportunities or threats Safaricom can get or face.
A. POLITICAL
i. Stability of the government. Given that Safaricom started doing business in the country, there has been relative stability, except for the Post Election Violence which occurred in after the 2007 general election. The violence led to a drop of profits from Kshs.19.9 billion in the financial year 2007/8 to Kshs. 15.7 billion in the financial year 2008/9 before tax. The stability of the country, even relative to its neighbors, has made Kenya to be a target for many investors. This has come up as a threat and opportunity. Threat in the sense that it has attracted other investors (Essar and Orange) apart from Zain which bought Kencel, which had started at the same time with Safaricom. This is a good opportunity as the company can continue to invest in the country and expect returns since instability is not expected. ii. New constitution. The enactment of the new constitution by the government, which was promulgated on 27th August 2010. The constitution promotes investment in the country as it provides for more stability in the country. Chapter twelve on public finance, section 231-2 on Central Bank of Kenya reads: The Central Bank of Kenya shall be

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