| dc.description.abstract | In the last two decades, one of the most fundamental questions emerging in strategic
management is how firms achieve and sustain competitive advantage. Organizations
succeed in a competitive marketplace over the long run because they can do certain
things their customers value better than their competitors. Only firms who are able to
continually build new strategic assets faster and cheaper than their competitors will earn
superior returns over the long run. In a struggle to survive, organizations are continuously
looking for a 'sustainable competitive advantage'. As industries mature and companies
can no longer differentiate themselves by attributes such as products or pricing,
organizations seek alternative ways of survival. Sustainable competitive advantage is
born out of core competencies that yield long term benefit to the company.
The study was designed with the aim of achieving two objectives: to establish the sources
of sustainable competitive advantage in the banking industry, and to determine strategies
adopted to achieve and sustain competitive advantage. The data that were analyzed were
gathered using a semi-structured questionnaire targeting corporate strategy managers of
the banks. Out of the forty-one banks that were targeted, thirty-one responded by
returning filled questionnaires. This formed 75.6% response rate, which were considered
suitable for analysis. To achieve the study objectives, respondents were presented with a
number of sources of strategies for sustainable competitive advantage and were required
to score on a 5-point likert scale the extent to which the sources were significant to
creating SCA and strategies pursued to achieve SCA.
The major findings of the study were that the sources of sustainable competitive
advantage were found to be internally generated. It was established that these sources
originated out of the possession of superior and high quality internal capabilities and
competencies. The sources that were found to be highly significant in generating
sustainable competitive advantage include: superior skills/capabilities of personnel (mean
score- 4.32), high level of service quality (mean score- 4.32), continuous learning on how
to do things better (mean score- 4.26), effective leadership focused on continuous
improvement of the bank's value adding systems (mean score- 4.03), and
superior/valuable resources (mean score-4.0); while those that were found to be
moderately significant include: possession of tacitlimplicitlintangible knowledge (mean
score-3.8), brand equity (mean score-3.71), highly charged, motivated and loyal
employees (mean score-3.27), rare, valuable, and imperfectly imitable organizational
culture (mean score- 3.27), reconfigured value chain of the bank (mean score-3.19), and
ability to analyze and predict the behaviour of competition (mean score-3.19).
With respect to the second objective, it was determined that the strategies that are
pursued tend to be mostly internally focused. Those that were found to be pursued to a
very large extent include: continuously developing existing and creating new resources
and capabilities (mean score-4.26) and undertaking radical innovations in the way the
bank does business (mean score-4.0). Those that were found to be pursued to a large
extent include: product differentiation strategy (mean score-3.94), product development
(mean score-3.83), leveraging unique firm attributes with information technology (mean
score-3.77), matching the bank's resources to the gaps (mean score-3.65), market
development (mean score-3.65), cost reduction strategy (mean score-3.58), tacit
collusion! cooperation strategy (mean score-3.47); while those pursued to a less extent
include: related diversification (mean score-2.74), strategic alliances (mean score-2.58),
and unrelated diversification (mean score-l.90).
It was however noted that in both the sources of and strategies for SeA, there were
variations among respondents with respect to degree to which a source generates SCA
and a strategy for SCA is pursued. It was concluded that the results of the study showed
consistency on organizational bio data, the sources of sustainable competitive advantage
and the strategies for sustainable competitive advantage. | en |
