Value creation in Kenyan e-businesses

Madigu, Godfrey Achono
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United States International University
E-businesses promise new avenues for creation of wealth. According to Amit and Zott (200 1), this value creation potential arises from the combination and exchange of resources . While research on value creation in e-businesses has been carried out elsewhere, the author is not aware of any such research on Kenyan e-businesses.Therefore, the study sought to examine sources of value creation for Kenyan e-businesses based on Amit and Zott's (2001) model. Amit and Zott claim that organisations can create value in e-businesses by leveraging on complementarities, novelty, efficiency and lock-in. The study was guided by two research questions. What are the sources of value creation for Kenyan e-businesses? Secondly, are the measures of value creation formulated by Amit and Zott, relevant to Kenya? The research methodology adopted was case study. This is a research strategy that attempts to examine contemporary phenomenon in real-life contexts. Listed companies with e-business implementations from the Nairobi Stock Exchange (NSE) formed the population. Companies examined include; Kenya Airways, TPS Serena and Nation Media Group chosen due to the richness of their e-business implementations. Data was collected from company annual reports, investor communiques, questionnaires, organization techniques were used for data analysis; the within case analysis technique which involved generating detailed case study write-ups based on questionnaires. The cross case analysis technique involved looking at the data in many divergent ways. The study findings showed that complementarities, lock-in, novelty and efficiency as identified by Amit and Zott (2001) were sources of value creation for all three Kenyan companies above. However, there were differences in the way the companies leveraged on these sources. Kenya Airways leveraged on efficiency, TPS Serena on complementarities, Nation Media Group leveraged on all the four sources; complementarities, novelty, efficiency and lock-in. The study also revealed that Amit and Zott's' (2001) model was relevant in the Kenyan context. The Kenyan companies studied created value in their business implementations by focussing on the different sources of value creation in their e-business. Kenya Airways in its e-business deployments was driven by the need to make its processes more efficient. Similarly, TPS Serena was driven by complementarities. Nation Media Group was the only company to have focussed on all four sources of value creation complementarities, novelty, efficiency and lock-in in its ebusiness implementations. The study findings revealed that the three Kenyan companies studied created value by leveraging on complementarities, efficiency , novelty and lock-in their business implementations. Kenyan companies should therefore make use of Amit and Zott's (2001) model in the design and implementation of e-businesses. The findings also showed that the importance of a source was determined by the industry a company operated in. It is therefore necessary for Kenyan companies to be informed of the critical value creation sources in their industries to adequately leverage on them.However, further research is needed to determine whether the difference in leverage of the value creation sources across industries is due to characteristics specific to the industry or due to chance. A research that includes value creation practices of more Kenyan e-businesses across different time frames and stages of maturity is therefore encouraged .
A Thesis Submitted in partial fulfillment of the requirements for the Degree of Master of Business Administration at United States International University