Influence of Strategic Alliances on Performance of NCBA Bank Kenya PLC

Abstract

Strategic alliances play an essential role to the success of modern organizations. Businesses are increasingly developing strategic alliances to improve their performance and market position. The establishment of strategic alliances is a reaction to globalization and the complicated and uncertain business environment. Companies are developing strategic alliances to help them expand their market share, enter new markets, develop dynamic skills, and lower operating costs The study aimed to investigate the influence of strategic alliances on performance of commercial banks in Kenya: A case study of NCBA bank Kenya PlC. The study used the following two theories; Resource Based View Theory (RBV) and Dynamic Capabilities Theory. The study was qualitative in nature, hence adopting a case study as its design. The research instrument used to collect the data was the interview guide. The data obtained by the researcher was analysed qualitatively by the help of content analysis. The study found that NCBA bank formed strategic partnership with in order to increase its customer base number, market share, improve customer service, develop more products or services and eventually achieve profitability. The study found out that NCBA bank had formed strategic alliances with the insurance firms through NBCA insurance agency. The bank had also formed a strategic alliance with Safaricom PLC so as to offer Mshwari and Fuliza products. The bank had also formed a strategic alliance with Isuzu Kenya. The strategic alliance allowed private schools and National Police Service to purchase and lease buses from ISUZU and get financed with NCBA bank. The study found out that NCBA had formed a strategic alliance with Mysafe Vaults and Kenya association of manufacturers. The study also found out that NCBA bank had a strategic alliance with Tilisi developments, Optiven Limited and Shelter Afrique. The study concluded that strategic alliance contributed to the performance of NCBA bank. The strategic alliances formed by NCBA bank can be attributed to have significantly improved the performance of NCBA bank and led to an increase in the customer base, market and profit of the bank. The study concluded that NCBA bank has been able to influence customers as the result of strategic alliances. The study also concluded that NCBA bank has been able to adjust to the changes and opportunity available in the market due to strategic alliance. The researcher concluded that NCBA achieved the following as a result of strategic alliances; markets expansion, increase in customer number, adoption of better technologies to improve customer service delivery and development of new advanced products and services for the customers. Lastly, the study concluded that NCBA bank has diversified its products and services though identifying opportunities and coming up with a product that meets the needs of the market segment identified. The study recommends NCBA to continue forming new strategic alliances for better improvement of the customers services and profitability of the organization. The study also recommends that NCBA to incorporate data protection in its strategic alliances. The study also recommends the government to offer support to banks by providing good working environment and favorable taxes.