It is the latest talk in town; the mobile phone wars.

The recent case involves two main local mobile phone operators who have been locked in tariff wars that have seen Zain Kenya reduce its cost of calls and message services to a price below half of the charges by the market leader, Safaricom.

But behind the wars between the firms lies a lesson to companies struggling to maintain business in a saturated market.

Local market

Experts say what is happening between the two firms has been a trend in the local market that has seen many firms having to restructure their operational strategies to maintain their places in the market.

"Strategy in a business operation should not be treated as an independent measure that companies take when warning signs begin to appear in the market. A well planned strategy should be able to show other business plans that run simultaneously with the core business. It is such plans that save the company from closure in cases of hard competition in the market," says John Mwangi, business development manager at African Alliance.

In 2002 for example, Unilever sold one of its main products; Kimbo, to Bidco - a move that was considered as having reduced the company's dominance of the consumer products market.

To strengthen its market presence, a considerable part of Haco industries was acquired by Tiger Brands, a South Africa-based company, threatening Unilever's dominance in the body and home care products market.

How well a firm employs the right strategy in its operations determines how far it can sustain itself in a market even when the opportunities in such a market seem diminishing faster than the investment ability of the company.

In some instances, mergers have seemed like the most sustainable solutions, forcing companies to close operations either by completely ceasing to exist or selling their products to other competitors and investing in new ventures.

According to Dr William Mwatu, who is the regulatory and medical affairs director at GlaxoSmithKline Kenya, strategies to keep a company afloat includes mergers and expansions.

"Initially, GSK focused in marketing its own manufactured products. But with the competition that is evident in the market, our strategy is to carry out in-licensing of products as well as collaborate with other companies so that we can market their products alongside ours ," he says.

The company, which has been in existence for close to 100 years, has undergone several structural changes to maintain its place in the market.

"Until 2000, what has been in operation were different companies running under common regulations. But in the year 2000, there were mergers and combinations of these companies to form GSK. The move was necessitated by a need to establish a stronger presence in the competing market," he adds.

Diversification of operations is commonly agreed upon as one way a company can maintain a market presence.

In the case of GSK, there was a change of product line from the original manufacture of baby foods and drinks such as Ribena which was a brand for the Smithkline Beecham Company, to manufacture of pharmaceutical products which are currently the company's main products.

"Diversification of products is important in sustaining a company in the market. It is possible that the business cycle of one product is different from the other. This difference ensures continuity in operation for a company that has a range of operations," says David Wang'ombe, the dean faculty of commerce at the Strathmore University.

Creativity and innovation, according to experts, form the basis for setting up strategies to maintain a continuous cycle for a business.

Innovation ensures efficiency for a company which helps reduce the costs of operations, hence maintaining the productivity of the firm without necessarily calling for a review of pricing to counter competition.

"Innovation means discovering new ways of doing what you have been doing. This means improved efficiency in offering the same service which translates into low costs of production. It is particularly important in ensuring that the right pricing is maintained hence giving a company a fair level in the competition," adds Mwangi.

A full business cycle will land a company at a point in the market where there are stagnant returns on investment, with even higher chances of a downward performance curve due to a non-expanding market.

Careful study of the feasibility of further investment undertakings is hence called for in the case of a company facing such a challenge.

"It is important that a company increases the rate of utilisation to maintain its profitability. In the case of Safaricom, in addition to diversifying into other services like money transfer, we should see more efforts to partner with banks for money transfer other than increased investment in buying ATM machines by the company," adds Wango'mbe.

Creative innovation goes further to enable a company devise ways of locking in its customers.

Customer interests

This is by investing in customer-interests centered products that will ensure customers loyalty is not swayed by the wave of competition in the market.

Even as price review seems an option most welcome by companies facing stiff competition, experts warn that such reviews should be undertaken as the last of option.

In a competitive market, prevailing conditions do not necessarily guarantee increased market share, hence any strategies invested in should be geared towards ensuring minimum costs of operation to maximise a company's profits.

While lowering operational costs seems to be a more sustainable solution to maintaining a business cycle, price reduction is, on the contrary, perceived to be a short-term solution.