| dc.description.abstract | In the recent years, the theory of sustainable competitive advantage has emerged as one of the most promising theoretical frameworks in management literature especially in the
field of strategic management. Porter, (1985) focused on a firm’s differential advantage or
uniqueness as sources of sustainable competitive advantage. Later Barney, (1991)
deliberately enhanced the concept by appreciating the importance of skills, assets or a
firm’s competitive resources as sources of sustainable competitive advantage. In the 21st
century according to Swee and Balakrihnan, (2010) there has been a paradigm shift
resulting in creation of new terminologies such as the learning organization, knowledge
management, management information systems, technology and innovation, globalization
etc. as sources of sustainable competitive advantage.
Opportunities in the banking industry still exists in the next few years, with the focus
areas being expanding current product offering, increasing product penetration, bringing
the un-banked to financial system, and capitalizing on the new consumer class by
developing innovative services and channel offerings and innovations have been overly
underpinned as a tool for enhancing competitive advantage.
Innovation strategy helps a company in three ways, exciting its customers, outperforming
competitors, and building a new product portfolio. Thus, banks must continue to innovate
in order to meet the changing needs and desires of the consumer, while at the same time
developing new fee structures to migrate consumers away from high-cost delivery
systems.
The main aim of the study was to determine the relationship between innovation
strategies and competitive advantage for banks listed in the Nairobi stock exchange.
This study will be valuable to banking industry especially to decision makers in the
creation of growth strategies, new product categories and services, the government would find the findings useful in establishing a conducive environment for technology adoption
and innovations for banks and financial policy makers in understanding the risks of
technology and innovations, it will also help other companies by exciting its customers,
outperforming competitors, and building a new product portfolio in formulation of innovations strategies that are competitive and customers in their quest to maximize the
customer satisfaction value from technology and innovations and to academicians will
form a body of knowledge innovation strategies and competitive advantage.
The research targeted respondents from banks listed on the NSE. Census survey design
since the population was small and the issues of analysis were critical. Secondary data
was collected from various websites of banks, banking journals, MIS journals and
relevant texts. Primary data was collected using drop and pick questionnaires on head of
change and strategies, functional heads, research divisions, information and technology
management division.
The researcher concluded that majority of the banks have adopted and innovated various
strategies so as to gain competitive advantage. The innovations and changes in these
banks mainly concentrated on introduction of Auto cash systems and change of the
banking systems. This has further resulted to increased benefits such as higher customer satisfaction, expanded market share, reduced operations turn around time and moreover, increased profits to the banks.
The limitation of this study was that it was carried out on all commercial banks listed in
the NSE. Future research should also be carried out on other commercial banks not listed
and whose innovation advancement is at moderate level; this will be important because it
will show the strategies the small banks have adopted. The data collection was based on
questionnaires. Further research can be carried by involving the respondents on
discussions so as to get their view on the innovations and strategies that they think can
sustain an organizations competitive advantage | en |
