Implementation Of A Strategic Alliance: Experience Of Kenya Post Office Savings Bank And Citibank
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Date
2002-08Author
Koigi, Nyambura A
Type
ThesisLanguage
enMetadata
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Firms adapt various strategies in order to remain competitive in an
increasingly global market. One of the strategies being adapted is
strategic alliance. Strategic alliances involve cooperation between
two or more firms who pool resources together to create value
proposition for their customers and for themselves. Strategic
alliances afford partners a higher likelihood of success than if a
firm had to go it alone. Strategic alliances create synergy for the
partners through shari ng of resources and capacities.
KenyaPost Office Savings Bank and Citibank formed a strategic
alliance in 1997. The two banks operate in a very competitive
financial sector. Interest incomes which hitherto formed the major
source of incomes for banks are shrinking and are likely to reduce
even further with possible enactment of the Central Bank
Amendment Act aimed at controlling interest rates. Banks have to
hedge this risk as well as leverage their resources and capacities in
order to be sustainable.
This research study sets out to identify the nature of the
strategic alliance between KPOSB and Citibank and to document the
experience of both banks in the formation and implementation
process. Other studies indicate that most alliances fail in their
first and second year of operation due to various reasons. These
reasons include, shifts in objectives of the alliance, lack of
sustainable investments in the alliance and lack of continuous
management oversight in the alliance. The study found that there
was management commitment in this alliance right from the start
and that the alliance has evolved over time to include a wide range
of clients and beneficiaries. There was transfer of technology
between the partners and the partners have received mutual
benefits from this alliance.
The study further found out that partners usually face many
challenges while implementing a strategic alliance and should always
work towards resolution of these challenges in order to retain the
relationship. The study established there is need for openness and
honesty from the beginning as this may affect the future of the
relationship because, like a marriage strategic alliances thrive on
mutual trust and equal sharing of benefits. Corporate culture was
identified as one of the concerns affecting strategic alliances.
However this study was not able to establish to what extent
corporate culture has affected the alliance. There is therefore
need for further study in this area.
Citation
Masters thesis University of Nairobi (2002)Publisher
University of Nairobi. Faculty of Commerce
Description
Degree of Masters in Business Administration (MBA)