Strategic Responses Adopted by Kcb Bank Kenya Ltd Towards Small and Micro Enterprises to Gain Competitive Advantage in Kenya

Abstract

There is a notable growth and development of the banking industry in terms of revenues, deposits, as well as the profits; a move that has brought about increased competition. This project investigated the strategic responses adopted by KCB Bank Limited towards SMEs to gain competitive advantage. The project adopted the case study design approach to answering the research question How does a strategic response adopted by KCB Bank Kenya Ltd influence small and micro enterprises banking in Kenya? Interviews were used in the collection of data for this study; and used 5 respondents who comprised of the head of departments as follows, 2 Head of SME, 2 head of customer service, and 1 head of marketing making a total of 5 respondents. The interview process was guided by the pre-prepared questionnaires to facilitate the in-depth coverage of the strategic responses adopted by KCB banking on SMEs. All the received questionnaires were checked for consistency and completeness. Thereafter, emerging themes formed the basis of data categorization. The data collected was analyzed qualitatively with respect to the strategic responses variables highlighted. Content analysis was used in analyzing the in-depth qualitative data that was collected. The findings of the study were; the strategic responses adopted by KCB towards SMEs to gain competitive advantage are product innovation whereby the bank as innovated the following products in the last three months: Business unsecured loans, invoice discounting, Internet banking, and KCB pay bill numbers. The study found out that the bank had fully embraced customer relationship management system which led high level of customer retention in addition to recruitment of new customers. The bank had also diversified in other lines like insurance, unsecured facilities to public and private learning institutions. Digital financial services had come up with new products like internet banking, KCB-Mpesa, Pay Bill and Mobi Loan. There was no restructuring in the last three years and customer feedback was obtained by filling forms as well as face to face interaction. There is a need for banks to come up with a variety of affordable products to make it easy for customers to access to more opportunities and hence, grow the customer base of the banks. Moreover, the study recommends more studies similar to this one, to be carried out but with the focus on other banks for a more generalized and a universal understanding of the needs of the customers. Further studies should be done on strategic responses adopted towards corporate institutions, personal banking to gain competitive advantage within the bank. Additionally, more research is needed to give a glimpse of the future expectations of the banking industry and its dynamics.