Strategies Adopted To Enhance Competitive Advantage By Commercial Banks In Kenya

Abstract

The study was on strategies adopted to enhance competitive advantage in commercial banks in Kenya. The question that the study sought to answer was what strategies are used by commercial banks in Kenya to gain competitive advantage in the Kenyan market. The study adopted a descriptive study design and the respondents were 38 banks. Data was collected using questionnaire and analyzed using SPSS. The results showed that licensing and strategic alliance are the two strategies that foreign-owned banks had used to penetrate the Kenyan Market. Other strategies that banks had used to gain a competitive edge here include decentralization of services, improving technological infrastructure and provision of foreign currency accounts. The strategies used by the various banks had been sustainable and they had improved competitive advantage. The key conclusion in this study was that even though all banks had strategic plans that they employed to give them competitive edge, these strategies were specific to their target market and goals and were not dictated by the industry. The main challenges that banks faced were competition, threat of substitute products and bargaining power of clients. Limitations of the study were that some of the subjects selected for the study were unavailable or unwilling to divulge certain information despite assurance of anonymity and confidentiality. Recommendations for future research would be to address areas that this research did not touch on such as comparing locally owned and international banks or focusing on specific banks as opposed to the industry in its entirety.