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Digital Business Transformation In Silicon Savannah How M Pesa Changed Safaricom kenya Case Solution

Solution Id Length Case Author Case Publisher
2183 644 Words (4 Pages) Tawfik Jelassi, Stephanie Ludwig IMD : IMD868
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It can be observed in the evolution of M-PESA that it was the first service of its kind. In fact it was the main reason for its growth in the market. As per the theory of disruptive innovation, for a product to be considered disruptive there is a certain criteria. For, e.g. in the existing markets the incumbents needs to be focused on more demanding tiers of market while ignoring the other one so there is a space created for new product (King & Baatartogtokh, 2015).

Following questions are answered in this case study solution

  1. Is M PESA Disruptive?

Case Analysis for Digital Business Transformation In Silicon Savannah How M Pesa Changed Safaricom kenya

That was the case in Kenya’s Telecom industry, none of the companies had thought about the product that can integrate telecom services with the financial transactions and that was the reason for its massive success. As mentioned in Exhibit 2, the company developed a simplified model of doing the traditional remittance business which lead to exponential growth of business.

The second point of disruptive innovations the ability of incumbent to overshoot customer needs and expectation by continuous innovation (King & Baatartogtokh, 2015). In case of banking industry th products nad services available for target customers have exceeded the needs and expectations. In terms of deposits as well as loan products there has been so much diversification of products. At the same time there are other segments of the market that are continuously ignored and the entire product development seems to be focused on specific segments. M-PESA took this space to build its own portfolio of products and services.

The third criteria that has been outlined for the product to be disruptive is the incumbent’s inability to respond and exploit the market in response of disruption (King & Baatartogtokh, 2015). Despite of having the resources and leverage of the network the companies often fail to respond to the new product or service because of their traditional ways of doing business.

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