mobile maerketing

1. SAFARICOM M-PESA
Section-A Group-7
Arth Patel, Ankit Kujur, Kush Chaurasia, Abhey Kumar,
Sharadchandra Solunke
Abstract
Digital Business Transformation in Silicon Savannah
How M PESA Changed Safaricom Kenya Case Solution

2. How M-PESA Changed Safaricom (Insead
Case)
Question -1 Analyze the transformation of M-PESA business model over last few years.
Digital Business
Transformation in Silicon
Savannah How M PESA
Changed Safaricom
Kenya
TWOS Matrix
Strengths
 Leading premium
company that operates
internationally
 Leading presence
across countries
 Reasonable control
over production and
distribution due to
backward and forward
integration
Weakness
 Major dependence on the
market as the country of
origin market
 Despite being in operation
for decades, has standard
procedures and regulations
for all portfolio items
 Imitability possible by
competition
Opportunities
 New South Asian
and Asia Pacific
regions available
for expansion –
emerging markets
 Acquisition of
medium-sized
similar companies
and shops in
developing
countries
SO strategies
 Expanding into Asia
Pacific region and
stabilizing emerging
markets by opening
new stores and
developing new
products
WO Strategies
 Increasing more stores
outside the country of
origin, and in other parts of
the world – especially
emerging markets such as
India, China and Brazil
Threats
 Increased
marketing from
competing
players, which
might affect sales
negatively
ST strategies
 Improving the
ambience of service,
focusing on augmented
service levels when
providing products and
WT strategies
 Increase budget for
marketing
communications, and
strategic promotions and

3.  An increasing
number of
independent
producers and
marketers
 Increased and
saturating
competition
adapting to local
culture.
pursue a moderate
expansion strategy
Question-2 Who were the main stakeholders who contributed to M-PESA’s success?
 Chief Executive officer – Bob Collymore was the major contributor to M-pesa success
story. He has a vision to innovate and bring financial inclusion to all section of society.
 Government- All the government policy help M-pesa to grew over the time because
government also get benefit form such platform. Example- M-pesa provide fertilizer data
to government which help them to make effective economy policy for Kenya people.
This mutual benefit contributes to effective utilization of resources.
 Financial Institution- M-pesa tie up with several banks to work smoothly under
financial system of country. Out of 2.5 million M-pesa user most of them open bank
account thorough M-pesa without being physically present at bank branch. Also, bank
used to send money from one applicant account to another using M-pesa service.
Question-3 What were the main reasons/factors for success of M-PESA in Kenya?
Huge gap
Dr Francis Wangusi, Director General of the, said the historical background of the service, its
origin specifically, as well as the nature of the Kenyan banking industry were some of the
reasons behind its success.
"In 2007 when M-Pesa came about, financial exclusion was pervasive in Kenya, as was the
proliferation of Micro Finance Institutions and Micro-credit savings unions. A significant
majority of Kenyans, mainly from lowly penetrated rural areas and low-income earners, were not
captured by the incumbent banking institutions. Banks were not accessible in remote areas and
had done little to bring financial services to the inhabitants of these areas.
Hassle free and accessible
M-Pesa in Kenya was rolled out by Safaricom, which by customer numbers was the largest
mobile service provider in East Africa’s largest economy.

4. Safaricom had a huge market share when the service was launched. That meant access to
millions of potential users. They also made an effort to study the system and convince people
that their money was going to be safe, according to Safaricom CEO Bob Collymore.
"The key with M-Pesa is trust. There has been a huge amount of effort put into ensuring that
customers’ money is safe. They do not need to see a building with four walls with the name of a
bank to trust that their money is safe. It is safe with us," he added.
He said that M-Pesa fitted very well with the traditional forms of exchange of money.
Transferring money through third party systems had been culturally accepted in Kenya for a long
time. Thus, M-Pesa did not cause any cultural dissonance with the users.
Accessibility and security
Added to that was the fact that it was simple to operate and access. Registration was very simple
and the costs were cheap. Also, unlike traditional banks, there were many access points called
"agents" all over the country. All one needed was an active Safaricom number.
Collymore M-Pesa continued to exceed expectations because it remained the easiest form to
transact in Kenya.
"M-Pesa continues to break barriers, in that it is the simplest way to do business in Kenya. As
long as you have a Safaricom line you have your future in your hands. There is no lining up in
banks, no need to produce affidavits
Question-4 What additional benefits accrued to Safaricom due to M-PESA?
Revenue source for Safaricom
M-Pesa creates economic value for Safaricom in two primary ways: Revenue from transaction
fees that Safaricom collects via the agent during cash withdrawal operations and transfer
operations (depositing money into mobile wallet is free). Reduce Safaricom customers' churn,
improve engagement, lifetime value etc.
Network Development of Safaricom
Safaricom relies on its extensive airtime distribution network to build out the agent network. The
entire network follows an agent aggregator model.
At the top of the hierarchy are master agents who are mostly Safaricom’s own dedicated airtime
resellers, but can also include large organizations such as Group 4 Securicor, branches of Equity
Bank, and some larger supermarket chains such as Nakumatt. The next level in the hierarchy is

5. made up of retail agents that are attached to and managed by approximately 300 master agents. A
single agency agreement is signed with a master agent who in turn recruits multiple outlets to act
as M-PESA retail agents. This approach has allowed Safaricom to very quickly increase the
number of M-PESA retail agents by signing agreements with a limited number of master agents.