Porter’s Five Forces and Competitive Advantage of Telecommunications Firms in Nigeria

Abstract

This study was conducted to investigate Porter’s Five Forces and Competitive Advantage of Telecommunications Firms in Nigeria. The survey research design was adopted in the study. The study had a population of 181 and was treated as census study. The primary instrument used in data collection was questionnaire. Two firms, Airtel and MTN were involved in the study. The study made use of the survey research design and achieved 61.38% response rate. Data analysis was done with multiple regression. The study revealed an adjusted R2 of 0.723 which implies that about 72.3% of the variables of Porter’s Five Forces studied when combined will account for about 72.3% changes in competitive advantage in telecommunications firms in Nigeria. Specifically, Buyers’ Bargaining Power (Beta = 2.981, t= 4.785, P< 0.05); Current Rivalry (Beta = 1.003, t= 2.145, P< 0.05); Threat of Substitute (Beta = 1.064, t= 2.011, P< 0.05) and Threat of New Entrant (Beta = 3.138, t= 3.017, P< 0.05) were all significant in influencing competitive advantage among telecommunication firms in Nigeria. However, Suppliers Bargaining power (Beta = 1.372, t= 1.847, P> 0.05). had no significant influence. It was concluded that Buyers’ Bargaining Power, Current Rivalry, Threat of Substitute and Threat of New Entrant were the key forces that influence competitive advantage among telecommunication firms in Nigeria, while Suppliers Bargaining power was weak and therefore, not capable of influencing competitive advantage among telecommunications firms in Nigeria. It was recommended that telecommunications companies in Nigeria should pay close attention to Buyers’ Bargaining Power and strategize on satisfying customers, meeting their needs and retaining their patronage; continuously monitor their competitors, launch aggressive campaigns, provide loyalty programmes and provide appropriate strategic response, strategize on retaining their customers and making difficult for new telecommunications firms to birth in the country; should ensure that their actions and policies do not cause their customers to switch to other brands but influence customer loyalty, in order improve their competitive position.