Research consultancy

Research consultancy

                                     CHAPTER ONE:

                                      INTRODUCTION

• INTRODUCTION:

This chapter involves the background of the study, historical, theoretical, conceptual, and contextual, problem statement, objectives, research questions, scope, significance, research assumptions and conceptual framework. And the research will seek to determine the impact of competition on the financial performance of Telecommunication Company a case study of MTN headquarters   Kampala Uganda

1.2 BACKGROUND OF THE STUDY:

       The study will aim at analyzing the impact of financial performance on the               telecommunication companies (MTN) Uganda. MTN is the leading provider of communication services, offering cellular network across.

MTN launched its services in Uganda in 1998 as the country’s second operator after celtel now zain (MTN Uganda corporate profile 2005). The company has recorded strong growth where it boosts 3 million subscribers and the end of August 2008(Wafula ,2008)

This saw the company boasting of good performance as its products and service were offered at a relatively cheaper prices than those of celtel now Airtel which was on market at that time. Hence becoming the leading market in the telecom industry. After some time, few years of operation Uganda telecom limited (UTL), which was previously a government parastatal, was privatized in June 2000 when it started offering mobile phone services. The latest entrant in the market being warid telecom limited which launched its services in 2008.  With the influx of other service providers, competition among these firms appears to be stiff and this has brought a lot of challenges in the financial performance of MTN Uganda. The trend in the telecom sector today has seen traditional telecom operators (MTN and Airtel) introduce a lot of new products and services in the market to gain competitive edge over others. MTN witnessed a downward trend in the revenue base as customers were moving to other competitors owing to loss of competitive advantage which had been given birth to by hyper competition that had hit the telecommunication industry. This affected the financial performance as the sales were no longer generating enough revenue to match expenses thereby causing loses. However, this motivated the researcher to investigate the impact of competition on financial performance of the telecommunication company MTN LTD.

1.3 HISTORICAL BACKGROUND:

MTN was established in South Africa in 1994 and quickly expanded operations, now serving 233 million customers in 22 countries in Africa and the Middle East. MTN is the one player in fourteen out of the Twenty Two in which it operates. Products and services include voice, data, digital, fintech, devices, cloud, managed networks, and infrastructure. MTN launched its services in Uganda in 1998 as the country’s second operator after celtel now zain (MTN Uganda corporate profile 2005).

1.4 THEORETICAL FRAMEWORK:

COMPETITIVE DYNAMICS THEORY

Key Thought Leaders: Ken Smith, Walter Ferrier, Hermann Ndofor, 2001

Competitive dynamics theory helps explain the interaction and impact of firm actions and competitor reactions in a given industry. Action can relate to any observable decision made by a firm for the purpose of defending their current competitive position or attempting to gain a new competitive position. Examples of actions may include making price changes, initiating special marketing activities, introducing new products, or withdrawing from a market. Reactions represent the corresponding response taken by a rival firm.

1.5 CONCEPTUAL BACKGROUND:

Competition refers to the activity or condition of striving to gain or win something by defeating or establishing superiority over others. Company’s competition refers to the ability and performance of a given company in trying to figure out how to take away market share from other company.

Financial performance is a subjective measure of how well a firm can use assets from its primary mode of business and generate revenues.

1.6 CONTEXTUAL BACKGROUND:

Ismail etal (2010), Majeed (2011), Dash (2012), Ruseel (2014), A-Rfou (2012), Hill and Jones

(2012) viewed competition as having a positive impact on financial performance; their opinion is that a company’s competitive advantage is strongly connected to its performance and that the advantages result in the company obtaining high profits. On the other hand, Molonket

etal (2014), Dlamini (2014), Alom etal (2016), Shin etal (2015), Odhiambo etal (2015) and

Assefa etal (2010) in Waithaka (2016) found competition as having a negative impact on the financial performance, they revealed that companies make excessive investments in trying to

manage competition which reduces the company`s profits.

1.7 STATEMENT OF THE PROBLEM:

The current telecommunication environment has seen MTN Uganda Ltd grapple with a number of challenges which among others include Unrealistic price discounts such as the MTN zone, customers (Daily Monitor 18^th November 2008, pg.20) complained that when MTN introduced MTN zone, they thought to save on their expenditures through making subsidized calls, however this is not what happened. Congestion in lines, delayed transmission of text messages; as customers try to benefit from promotional offers made by the company. In effect to this, has resulted into customers switching completely to other available networks like Airtel. Loss of revenue due to huge discountss offered by the company to its customers as a mechanism to retain them, reduced profit and reduction in the market share. This therefore has motivated the researcher to investigate the impact of competition on financial performance of MTN LTD Kampala Uganda.

1.8 GENERAL OJECTIVES:

To determine the impact of competition on the company’s financial performance.

1.9 SPECIFIC OBJECTIVES:

 To establish the relationship between competition and financial performance

To assess how market share affects the company’s profitability in a competitive environment.

To establish the best practice in dealing with competition in telecommunication companies.

1.10 RESEARCH QUESTIONS:

Is there a relationship between competition and financial performance?

How does market share affect the company’s profitability in a competitive environment?

What is the best practice in dealing with competition in the telecommunication industry?

1.11 SOPE OF THE STUDY:

1.11.1 GEOGRAPHICAL SCOPE:

The study will be conducted in mobile telecommunication company (MTN Uganda limited) headquarters in Kampala.

1.11.2 CONTENT SCOPE:

The study will cover the relationship between competition and financial, how market share affects the company’s profitability in a competitive environment and the best practice in dealing with competition in the telecommunication industry.

1.12 SIGNIFICANTS OF STUDY:

The research study will be of importance to the managers that are in the telecommunication industry and to other managers that are in other sectors. It will help them in understanding the concept of competition and how different firms can achieve competitive advantage them. The research study will be used as reference for academic research studies on similar topics and the research will be of assistance to those academicians who will want to carry out a research on the same topic.

1.13 ASSUMPTIONS:

The information that will be received from the participants will be reliable.

The facts that will be obtained from various studies will be relevant and will assist in making the research more meaningful and beneficial.

1.14 CONCEPTUAL FRAMEWORK:

INDEPENDENT VARIABLE                                                     DEPENDENT VARIABLE

Financial performance

Competition

1.15 SUMMARY

The chapter outlines the reason for the study and why its significant. It covers the background of study, objectives of study, the research question; it also covers the statement of the problem, the research study will be centered on understanding competition and how it impacts on financial performance.

                    CHAPTER TWO:

                      LITERATURE REVIEW:

2.0 INTRODUCTION

The significant information viewed in this chapter provides a basis for the research study, which will focus on how competition impacts on financial performance. It will provide an understanding on the concept of competition, the relationship between competition and financial performance, an assessment of how market share affects the company’s profitability in a competitive environment and the detailed analysis on the best practices of dealing with competition in MTN Telecommunication Company. This chapter also provides an analysis on the significant opinions and it further analyses the conclusions that were reached by previous researchers in the similar study with an aim of coming out with a conclusion on the other gap

2.1 THEORATICAL REVIEW:

COMPETITIVE DYNAMICS THEORY:

Key Thought Leaders: Ken Smith, Walter Ferrier, Hermann Ndofor, 2001

Competitive dynamics theory helps explain the interaction and impact of firm actions and competitor reactions in a given industry. Action can relate to any observable decision made by a firm for the purpose of defending their current competitive position or attempting to gain a new competitive position. Examples of actions may include making price changes, initiating special marketing activities, introducing new products, or withdrawing from a market. Reactions represent the corresponding response taken by a rival firm.

The competitive dynamics model looks at both the firm initiating a competitive move as well as the reacting rival firm. Several characteristics of the initiating firm’s action are considered by the competitor before formulating a response. First, the magnitude of the action is assessed. For example, an action that required significant financial investment or resources would be considered high magnitude and warrant more competitive attention. Second, the scope of the action is relevant. An action that has an impact on multiple competitors is more potentially threatening than an action that has an impact on only one competitor firm. Third, the type of action (tactical/temporary versus more strategic) is considered.

Several attributes of responder’s reaction are also relative to the competitive dynamics, including the likelihood of a response (if the attack is substantial, the likelihood is higher) as well as the frequency and timing of the response. The longer the time lags between action and response, the greater the advantage to the initiator, also known as a first-mover advantage. In addition to the attributes of the actor/action and reactor/ response, the characteristics of the industry itself also impact the competitive dynamics model. For instance, a high rate of industry growth can reduce competitive interactions, as the growing demand minimizes the need for individual firms to jockey for position. Likewise, a more concentrated market with a smaller number of competitors leads to more collusion and less competitive activity. An industry with high entry barriers limits the number of new entrants that incumbent firms need to be considered with.

2:2 REVIW OF THE RELATED LITERATURE:

2.2.1 Relationship between competition and financial    performance:

Competition and financial performance are two different constructs with a complicated relationship .General studies have shown a positive connection between these two variables,

Competition is taken as independent variable and financial performance is taken as the dependent variable that is measured in terms of sales growth and profitability (Majeed 2011).Hill et al (2015) agreed that a relationship exists between competition and the financial performance he stated that competition is a difficult process where the competitive companies are the ones who manage to win. A company may improve financial performance if it can sell its products in a competitive market and draw customers from its competition and increase sales revenue.

Companies can realize high profits in a competitive market if a competitive edge is obtained, this will results in increased sales and improved profits, managers must work at obtaining a competitive advantage in order to improve the profitability of the company.

Russell and Harvey (2014) also supported that a relationship exists between competition and financial performance, he added that if a company gains a competitive edge it can become competitive and improve its financial performance. Hill and Jones (2012) also supported that a positive relationship exists between competition and financial performance which can be analyzed in terms of return on sales revenue. A company which has a competitive advantage will realize very high profits.

A relationship was found between competition and financial performance, although a positive relationship was found, some researchers were of a different view. Mutua (2010) revealed that there is a negative association between competition and financial performance when he stated that advertising campaigns may be done to increase product demand, however the advertising costs need to be covered by the revenues obtained, if there is competitiveness in the market then low profits will be earned. This is because consumers will only buy from the cheapest. Yahaya et al (2015) supported that a negative relationship can be found between competition and financial performance. They stated that competition negatively impacts on the company’s financial performance. In intense competition in the industry competition may result in low profits if the company is not competitive. Managers need to find ways of being competitive in order to improve profitability. Assefa and Hermes (2010) in Waithaka et al (2016) also supported that intense competition results in reduced activity levels in companies which results in competition negatively impacting on the company’s performance. The accountant even confirmed that, increased competition puts pressure on MTN Telecommunication Company to become cost efficient. With increased competition, MTN needs to find ways of delivering services at lower costs to ensure that they beat competition. Increased competition is associated with falling profit rates.

The relationship between competition and financial performance can be positive or negative .A positive relationship can be found between competition and financial performance, this can be seen in most cases when companies enhance the quality of their products to be competitive, company’s performance is enhanced as the customers’ needs would be satisfied by the product quality. However, due to competition companies may face a decrease in profits and in productivity as a result a negative relationship between competition and financial performance is created (Odhiambo 2015).

Wang et al (2014) found competition and the company’s financial performance as having a negative relationship .However they also found that a positive relationship between competition and the company’s financial performance could exist. Competition drives companies to enhance product quality and it also forces managers to be more efficient, this consequently increases the company’s’ profits. Where competition is intense, companies fight for profits, companies which are more efficient are the ones which survive.

Asikhia and Binuyo (2012) also found that competition and the financial performance may have positive or negative relationship. They postulated that competition and financial performance may have a positive relationship. However competition and financial performance was also seen to have a negative relationship. They found that companies that are efficient have power and that they take over from companies that are less efficient as they benefit from the efficiency that results in a competitive advantage.

This study will seek to iron out the different views and ascertain exactly how competition impacts financial performance in a company.

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2.2.2 An assessment of how market share affects the company’s   profitability in a competitive environment:

In the time of intense competition companies are making efforts to maximize profit by diverting their focus to managing the factors which can affect their financial performance. A high market share is a major factor that has a great influence on the company’s financial performance. Whenmarket share is high the profitability of the company increases. A firm that has a high market share stands a chance to generate more sales and receive huge profits Aqil et al (2014). Oinonen

(2010) supported this when he stated that a high market share results in the company’s profitability. He further added that market share is very significant as it increases company profits. When a company has a large market share it can set high prices that are above the competitor and still remain profitable as a large market share is associated with customer loyalty.

Wit and Meyer (2010) were of the same opinion when they hypothesized that high market share leads to profitability. They found that high market share provides opportunities for companies to supply huge volumes of products to the customers. The huge volumes of supply may result in cost reductions as the company will be benefiting from the economies of scale. Companies with high market share can set high prices and still experience a profit as customers believe that where there is a large markets share there is less risk.

Kortler et al (2013) had a different opinion about market share, he was of the opinion that higher market share does not give an assurance of getting high profits. Gaining market share might not give the company high profits. In an effort to gain market share the company may experience costs that are above the returns, this will not result in an increase in profits. On the other   hand he found that high market share may lead to high profits when the cost per unit drops when the market share increases, this can be achieved when firms provide products of high quality and sets a high price that can exceed the costs of producing high quality.

Mathur and Kenyon (2011) also agreed to this when they alluded that market share alone cannot be a source of profitability, market share can only generate profits when good product quality and other company intangibles are present. Chu (2011) also supported this view, when he postulated that market share may affect the company’s financial performance negatively or positively, companies that want to increase market share cannot generate high profits without product differentiation, the market share of a company may only increase profits if the company has market power and ability to manage quality.

A large market share does not necessarily result in high profitability; a company can have a low market share yet be highly competitive. The growth of an industry does not determine that the industry is attractive furthermore; high market share does not always give cost reductions as others studies imply Furrer (2016). Mody et al (2011) supported this, when they postulated that a company with a large market share does not necessarily have high profit margins. They found that conducive financial and environmental conditions could result in the profitability of a company. Yannopoulos (2010) supported that in an ever changing competitive environment a huge market share does not always lead to high profits. Management must use limited resources in enhancing the productivity of best practices, and desist from making efforts to increase market share, in a hope to increase profits from the huge market share.

MTN had a decrease in market share, low volumes of revenues were being experienced, and this resulted in a decrease in profits as indicated by the annual financial reports. The decrease in market share due to competition exerted negative pressures on MTN Telecommunication Company’s performance.

Studies that were made explained how the level of market share affects profitability of the company, this study aims to determine how markets share can be increased in order to boost profitability in a competitive environment.

2.2.3 The best practice in dealing with competition in Telecommunication companies:

Alshbiel and Awaqleh (2012) considered JIT (just in time system), as best practice that companies could use to be competitive in the telecommunication industry. It was seen to be effective as it decreases the costs of opperation. The practice monitors and manages costs, they seek for less expensive inputs for operation, enable cost-effective use of resources by ways of reducing costs without affecting the quality of the products and services. JIT helps in improving the quality of products; it produces the products and delivers them on time so as to ensure that the customers’ needs are met. This enables the company to increase sales and enhance its financial performance. Zaferullah et al

(2013) was in agreement with the use of JIT in dealing with competition when he stated that in the current state of international business situation, the aim of all industrialized companies is to continue surviving in the race. In order for a company to survive in a market that is competitive it must have the capability of producing high quality products at costs that are low and within a very short time. Telecommunication companies especially MTN can accomplish this through the use of JIT systems.

Mazania (2012) also agreed with this when he postulated the use of just in time system in  telecommunication industries has been proved to be a success as it reduces waste, reduces costs,

results in productivity effectiveness and improves product quality. JIT system enables deliveries to be made to the customer on time .JIT allows the company to get the exact information about the customer requirements.

Kootanaee et al (2013) also supported that the JIT system allows the company to be competitive against its competitors. It identifies and meets customer needs, reduces waist, minimizes costs and improves the production process .JIT enables employees to work together as a group to achieve goals, workers are motivated to constantly make improvements on what exists and to achieve high standards.

JIT may not be a total solution in an unstable competitive environment as it has its challenges.

Many companies experience difficulties in implementing Just in time in their telecommunication system. The problem is due to the uncertainty about JIT and its implication and partially due to the desire to apply JIT in the already existing organization arrangement (Mahajan et al 2013).

Mohamed and Talibson (2013) agreed that JIT cannot work in some companies due to its implementation challenges; it faces worker resistance as there is no assurance of job security and some suppliers cannot apply it successfully.

Some studies viewed the JIT system being both positive and negative Monden (2012) supported this, he found that the JIT system was beneficial as it removed waste and excessive labor force.

The JIT system was however seen to be negative in that  it was not considering some working factors, forexample  if excess labor force was removed the JIT system causes the remaining labor force to over work and this gives a lot of strain to the worker, and may result in poor service delivery to the customer. Nahmias and Olsen (2013) also agreed to this when they postulated that the JIT system reduces waste and avoids the overstocking of inventories as products are produced only when required by the customer. The problem with just in time system is that the company has to work with the same supplier in order to build a good relationship. In order to produce the products when they are required by the customer the supplier must act fast and supply the required material to the manufacturer exactly when it’s required. In the JIT system there is a risk the supplier might not be able to supply materials when they are required.

Agrifoods was holding large amounts of stock in anticipation for sales .This caused the some stocks to expire before there were bought. However, it could be essential for the company to consider implementing JIT to avoid waste and tying working capital on inventory. The previous studies that were done explained how JIT operates, this research is aimed at assessing the JIT system and establishing how best it could be used as the best practice of managing competition in the telecommunication industry.

2.3 GAPS IN THE LITERATURE:

The existing literature identified challenges affecting financial performance in a competitive environment as the gap absent like Investing in quality to gain a competitive edge affects financial performance Christian (2011) in Shin et al (2015) mentioned about this gap as competition intensity causes companies to over invest in gaining competitiveness in the market. Competition intensity results in over investment in product quality wars between companies; this reduces company profits and affects the sustainability of the company Sadikoglu (2014) found that total quality management may have negative or positive effect on performance, he postulated that TQM in an attempt to manage competition may succeed, however it may fail to achieve the desired results as some companies might not have resources to implement TQM. Nzewi (2015) also agreed that TQM has a positive or negative impact; total quality management may not succeed in improving financial performance

2.4 SUMMERY

In this chapter the researcher will look at the literature review of previous studies that were done in relation to the research study. The chapter will manage to provide a detailed analysis of how competition impacts on financial performance through the literature review. The literature also gives an insight of how companies can deal with competition and consequently improve financial performance.

                         CHAPTER THREE

                               RESEARCH METHODOLOGY:

3.0 INTRODUCTION 

The chapter underlines the research methodology that will be used in collecting of the data, organization, processing, analyzing and presenting the data for the purpose of the research of  the impact of competition on financial performance using a case of MTN Ltd Kampala Uganda. The chapter clearly shows how the research will be undertaken.

3.1 RESEARCH METHODS

Research methods are techniques and tools that are used in carrying out a research Williman

(2011).Research methods are methods used for the gathering of data, for example, interviews or questionnaires Greener (2008). Cottrell and Mc Kenzie (2011) outlined the research methods which are, Quantitative, Qualitative and Mixed method. He explained that the quantitative method is used in responding to questions on the relationship between variables, it captures numbers and carriers out statistical tests. The Qualitative research method captures words and phrases and they look for their meaning and concept behind them. The mixed approach uses both the qualitative and quantitative approach this method provides a broader understanding of the research under study. Creswell and Clark (2011) found that the mixed method responds to questions that the quantitative and qualitative as the quantitative methods cannot answer alone.

In this research the researcher will use the mixed method .The researcher will find both the qualitative and quantitative method as being useful for the study. Qualitative method will be necessary as the researcher will enquire from the managers and employees about the competition and how it impacts on financial performance. The use of numbers will also be seen to be of outmost importance as it gives numerical evidence of how competition impacts on financial performance.

3.2 RESEARCH DESIGN 

The research design is a blueprint for gathering and analyzing of information, it gives answers to the research questions .It is the collection of information, the research design allows the process of the research to have an even flow. It ensures that the results are more precise. A research design shows the researcher carried out his research ,it is a structure used to gather ,access and translate the data Stangor (2010).Adams et al (2014) sighted that a research design shows the procedures and methodology used for gathering and analyzing of data required and it responds to the questions. The researcher will use the descriptive research design to answer the questions of this study. Using the descriptive research design the researcher will be able to obtain a better understanding of the study as it allows the use of the mixed research method.

3.2.1. Descriptive research design:

According to Stangor (2010) descriptive research design looks at the existing state of affairs it can be either qualitative or quantitative in its orientation. If a researcher wants to find out the relationship between variables the descriptive research can be carried out to establish the correlation between the variables. The researcher will use the descriptive research as a correlation will be carried out to determine if competition impacts on financial performance. The descriptive research will be appropriate as it allows the researcher to use both the qualitative and the quantitative methods for the research. Kumar (2011) stressed that descriptive research aims to describe the current state of affairs, problem or to provide information pertaining to condition or to describe an attitude towards a particular matter for example the type of service provided by a company, the employees attitudes, the needs of others .The use of this design will enable the researcher to enquire about the competition edge, consumer perceptions and attitudes to MTN products and services against the competitors.

The company’s environment, advancements, and innovations will be analyzed as the employees and managers will be questioned and requests will be made for them to respond to the questions that will be designed to access the ordinary state of affairs. This will reveal challenges that are affecting the financial performance in a competitive environment.

The design will provide important information that will be used to give practicable recommendations to MTN and other parties in the telecommunication industry on ways in which they could adjust their competition strategies and best practices so as to improve their competitiveness and performance.

3.3 CASE STUDY               

According to Hammand and Wellington (2013) a case study gives an example of a particular thing, it is an analysis of a unit. They further explained that it is most appropriate on small sized studies in which the researcher has access and some knowledge of a certain context and has a drive to determine what is taking place in that context. Case study is an enquiry that centers on predicting, obtaining an understanding, describing or controlling the person, industry or entity Woodside (2010).

The researcher will use a case study of telecommunication companies MTN headquarters Kampala Uganda, as the research will be carried out on a single unit, the researcher will make a detailed analysis on the research and obtained an understanding of how competition impacts on financial performance.

The case study uses both qualitative and quantitative methods (Rovonne 2011), the case study is appropriate as the researcher will use the mixed methods. The case study can use interviews, documents reports, and newspaper articles (Vin 2012).

The case study will allow the researcher to save time and costs as the researcher will use the information provided by the MTN reports, flyers among other documents. Considering that impact of competition on financial performance is very broad the research will require significant amounts of money and more time, the case study  will manage to alleviate this problem by making the researcher carry out the researcher on a smaller scale, which make it cheap and less time consuming.

3.4 TARGET POPULATION 

Target population is the gathering of objects that hold the data that the researcher requires

(Bajpar 2011).Target population is the total set of objects significant to the research. They are important because they carry the information that the research is structured to gather (Hair et al

2015). an accessible population is the portion of the population that the researcher can have access to, for the research purpose (Trochim et al 2015).

The population for this study will consist of MTN management, accounts staff and customers. Below is the table will show the targeted population and the accessible population.

Table 3.1: MTN Company’s population for the study

3.5 SAMPLING DESIGN

3.5.1 Simple random sampling

Simple random sampling will be used in selecting respondents from the sample frame. The researcher will use this technique to ensure that each members of the target population has an equal and independent chance of being included in the sample of this study.

3.5.1 Sampling size

A sample size of 33 respondents will be selected using simple random sampling consisting of 6 management,7 accounts staff,5 sales staff, and 15 customers. Kralje and Morgan (1970)

S=X2NP (1-P) ÷d2 (N-1) ⁺ x2p (1-p)

S= required sample size

X2=the table value of chi-square for 1 degree of freedom at the desired confidence level (3.841)

N= the population size

P= the population proportion assumed to be 0.50 since this provided the max size

3.6 TYPES OF SOURCES OF DATA:

3.6.1 Primary data  

The Primary data is that type of data that the researcher collects for the first time with a particular research aim in mind (Kumar Sahu 2013).The primary data will be gathered from

MTNs records the information obtained will be used to respond to the research study questions.

The researcher will make use of questionnaires and interviews to acquire information from management, employees and customers, the information that will be obtained will be used on the research. The information which will be obtained will reveal what will actually take place at MTN telecommunication company and this is important as it will reveal the issues of the impact of competition on the financial performance.

3.6.2 Secondary data

This type of data is collected and used by someone or an organization, the researcher does not collect the data Kumar Sahu (2013). Secondary data cuts costs and serves time as the researcher does not have to use a lot of time on fieldwork since the data will have been collected (Williman

2011). In this research the secondary data will be derived from Textbooks, websites, journals, newspapers and MTN telecommunication annual reports.

Although the primary and the secondary data have certain advantages there are not free from disadvantages. The primary data tends to be expensive and time consuming while the secondary data obtained might not be appropriate for the particular research and the data obtained might not be understandable to the researcher it may be complicated. The researcher will use primary data and secondary data to counter the disadvantages of both sources of data.

3.7 RESEARCH INSTRUMENTS

According to Mligo (2016) Research instruments consist of all methods that permit the researcher to collect data from the field or from any other place of study. There are tools that are used for collecting and analyzing data. The researcher will use MTN telecommunication company’s records, questionnaires and interviews as a tool for obtaining data from Managers, employees as well as customers.

3.7.1 Interviews:

Ololube and Kpolovie (2012) stated that an interview is a situation in which one person, the interviewer, asks the interviewee questions which intend to obtain answers relevant to the particular research problem. An interview can be used to collect data for different situations for example it can be used to collect data for survey situations, it can also be used in sampling the respondents, or on a question and answer session were there are one or more people. An interview provides a good way to obtain more detailed information from a person for research purposes.

3.7.1.1 Face to face interview

According to Williman (2011) a face to face interview can be done in different situations it can be carried out outdoors, in a home or at the work place .The face to face interview can be used in interviewing one person or a group of people. Face to face interviews have the advantage in that non- verbal communication can be used, the researcher can ask and follow up on questions.

Individuals are allowed to say as much as possible in a face to face interview, further elaboration can be made so more information can be obtained from a face-to-face interview (Driscoll 2011).

3.7.2 Questionnaire:

A questionnaire is one in which questions are set and printed, these questionnaires are issued to the various respondents so that they can respond to questions that are on the questionnaire. The respondents answer the questions in writing and return the questionnaire (Mligo 2016).

Questionnaires are most appropriate in obtaining qualitative and quantitative data. The technique allows the researcher to sort out the questions and obtain the responses to the questions without out talking to the respondents. Questionnaires are well designed, it is easy for the respondent to answer and it is fast and less expensive to administer. There is less bias as the respondent is required to answer the questions alone (Williman 2011). The researcher will use questionnaires as a research technique as it proves to be valuable to the research study, the questionnaires will be distributed to the respondents and the respondents will be given time to respond to the questions prior to returning them.

3.7.2.1 TYPES OF QUESTIONS

3.7.2.1.1 Closed and open ended type of questions.

Walliman (2011) the closed ended questions require the respondent to select from a number of answers that will be given. There are usually answered quickly, there are easy to understand and the respondent is not required to have special capability of writing , however the questions put limits to the choice of answers. The closed ended questions can be analyzed easily these questions save time as there are fast as short responses are required. The closed ended types of questions prove to be less demanding and time serving to the respondents. Open ended questions are questions that allow the respondent to freely respond in their own way. The questions usually allow the respondent to fully express and justify the responses that they give. This avoids biasness and the answer provided can be interpreted by the researcher. The disadvantage of the open ended question is that it is time consuming and may be difficult for the respondent to understand.

3.7.2.1.2 Likert scale questions

According to Hair (2011) a likert scale attempts to measure attitudes or opinions, it assesses the strengths of agreement or disagreement about a statement. The Likert scale has the statement and the responses showing the level at which the respondent agree with the statement. The likert scale as shown below is clear and can easily be analyzed. It is easy to understand and it less time consuming for the respondents.

Table 3.2: Likert Scale

3.8 DATA VALIDITY AND RELIABILITY 

According to Ololube and Kpolovie (2012) Reliability refers to the level of uniformity of

measuring strategy over a period. Its concern in the uniformity with which the instrument

carriers out its measurement on what it measures. Reliability also refers to error free

measurement in the instrument used for measuring. Validity ensures that the research is not

biased and it checks the research quality, it ensures that a test measures that which it actually

purports to measure. The researcher will ensure that the information acquired will have validity and reliability; the researcher will cross check the information that will be obtained to eliminate errors.

3.9 DATA PRESENTATION AND ANALYSIS 

The researcher will use different techniques for the analysis and presentation of the data that

Will be gathered on the research. The qualitative and quantitative methods will be used to analyze and present data. The researcher used tables, Pie charts, and graphs to present the gathered data. The relationship between competition and financial performance will be established through regressions analysis, the (SPSS) Statistical Package for special Sciences computer package is of great assistance in this. According to Yahaya et al (2015) competition and financial performance have been the focal point for many studies. The cause of the great number of studies is that financial performance is at the heart of most corporate studies. SPSS is the preferred statistical analysis tool for the study. Return on revenue will be used as the proxy for competition while annual profit will be used as a proxy for financial performance. For the purpose of the research study, coefficient of correlation will be used. Russell et al (2014) and Yahaya et al (2015) revealed that a relationship can be found between competition and financial performance when they used correlation coefficient.

Regression formulae

Where:  r = coefficient of correlation

x = independent variable (Return on revenue)

y = dependent Variable (Annual profits)

3.10 SUMMARY  

The chapter shows how the research will be carried out .It indicates that the mixed methodology

Will be used, It also shows the research design and the research instruments that will be used to collect data.

The target population is shown as well as the analysis and presentation of Data. This chapter clarifies how the research will be done and all the activities the researcher will perform during the research process. In the preceding chapter the research findings will be presented and analyzed using the techniques discussed in this chapter.

MANAGEMENT AND EMPLOYEE   QUESTIONNAIRE

Please read through the questionnaire and respond to the questions by ticking the appropriate box. May you respond to all questions on the questioner, please be advised that all the information that you will provide will be treated with great confidentiality.

SECTION A

1) Gender

Male

Female

2) How many years have you worked for MTN LTD Uganda?

1 – 5 years

5 – 10 years

10-20 years

More than 20 years

3) Age

Below 18 years                            

18- 35 years

36 – 60 years

Over 60 years

SECTION B

1) What is the relationship between competition and financial performance?

2) How does market share affects the company’s profitability in a competitive environment? 

 3) The use of JIT as the best practice in dealing with competition in telecommunication industries has the following effects.

CLIENT: QUESTIONNAIRE

Please read through the questionnaire and respond to the questions by ticking the appropriate box. May you respond to all questions on the questioner, please be advised that all the information that you will provide will be treated with great confidentiality.

SECTION A

1) Gender

Male

Female

2) Age

Below 18 years

18 – 35 years

36- 60 years

Over 60 years

3) How long have you been using MTN services and its products?

Less than a year

Between 1 – 5 years

Between 5 – 10 years

More than 10 years

SECTION B

Tick where appropriate.

• How do you view the MTNs Products and services?

• How do you view the customer service provided by MTN LTD Uganda?

3) Would you want MTN to change the quality of its products and service delivery?

Yes

No

THE IMPACT OF COMPETITION ON THE FINACIAL PERFORMANCE OF TELECOMMUNICATION COMPANIES ACASE STUDY OF MTN LIMITED HEADQUARTERS KAMPALA UGANADA

                                                BY

                               EDONU ABRAHAM

                              17/U/17640/BSD/GV

A PROPOSAL SUBMITTED TO, SCHOOL OF MANAGEMENT AND ENTREPRENURESHIP IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE AWARD OF A BACHELORS DGREE IN BUSINESS STUDIES WITH EDUCATON OF KYAMBOGO UNIVERSITY.

REFERENCES:

Yahaya, O. A., Farouk, B.K.U., Yahaya, L.S., Yusurf, M.J and Daniel. S. (2015) ‘Impact of

Competition on the Financial Performance of Listed Deposit Money Banks in Nigeria’,  Journal

of Economics and Sustainable Development, vol. 6, No.18.

Russell, S.N .and Harvey, H. H. (2014) ‘Exploring the Relationships among Sustainable

Manufacturing Practices, Business Performance and Competitive Advantage: Perspectives from

a Developing Economy’, Journal of Management and Sustainability, Vol. 4, No. 3, 1925-4733.

Sabri, R.A., Xinping, X. and Sabri, S.A. (2014) ‘Using Target Costing to InvestigatesCompetitive Price’, The Journal of World academy of science, Engineering andtechnology.

Sadikoglu, E. and Hilal,O .(2014) The effects of Total Quality Management Practices and the

Reasons of Barriers to Total Quality Management Practices in Turkey, Hindawi Publishingcorporation advances in decision sciences. Shin, H., Shin, J., Yahoo, S., Song, J. and Kim, A. (2013) ‘Strategic delegation, qualitycompetition, and new product profitability’,Management Decision, vol. 53, no.3, pp.713-729.

Tanwar, R. (2013) ‘ Porter’s Generic Competitive Strategies’,  IOSR Journal of Business and

Management (IOSR-JBM) ,vol. 15, no. 1,pp. 11-17

Toa, F. (2014) ‘Customer relationship management based on increasing customer satisfaction’,International Journal of Business and Social Sciences, vol.5, no.5.

Wang, F.S., Jou, J.Y., Chiun, C, K. and Wu, W. K. (2014) ‘Industry competition, agencyproblem, and firm performance’, Romanian Journal of Economic Forecasting, vol.4

Waithaka, P., Bula, H. & Kimencu, L. (2016) ‘Effect of technology oriented competitiveintelligence practice on the performance of firms listed on the Nairobi securities exchange,

Kenya’, International Journal of Education and Research, Vol. 4 No. 2, pp 473-478.

Yannopoulos, P. (2010) ‘The Market Share Effect: New Insights from Canadian Data’.

Yasar F. (2010) Competitive Strategies and Firm Performance: Case Study on GaziantepCarpeting Sector. Mustafa Kemal Universities Sosyal Bilimler Enstitusu Dergisi, pp. 3