| dc.description.abstract | The 1980s saw the beginning of Structural Adjustment Programmes in Kenya that sought
to correct the slow economic growth and stagnation of the public sector. Subsequent to
this, the 1990s ushered in the public sector reforms that called for market- driven systems.
This amounted to liberalization of controls towards a market - driven economy. Coupled
with these local changes were the globalization and Information Technology phenomena.
These changes were immense and were bound to impact intensely on a hitherto protected
economy.
The changes affected all the sectors of the economy. The banks were not spared these
monumental changes. The study sought to identify changes that have affected commercial
banks in Kenya since 1980s and to further identify the strategies that the commercial
banks, which participate in clearing house, have applied in order to respond to these
changes.
For the purpose of this study, all the commercial banks that participate in clearing house
were contacted. These were forty-four (44) as 'at the time of our study. However, only
twenty-eight (28) of them responded as at the end of the research period. This constituted
about 64% of response. The study was carried out by the use of a questionnaire which
consisted of both open-ended and closed questions. The data so collected was analysed by
use of statistical package (SPSS) and presented in tables, frequency distribution,
percentages and other descriptive statistics. Further, factor analysis was carried out in
order to determine the major factors that impacted on commercial banks that participate
in clearing house.
The study revealed that there were several factors that impacted on commercial banks
which included global and local competition, bargaining power of supplies, increasingly
demanding customers, changes in Information Technology and threat of substitute
products. Factor analysis was however able to determine the key factors as being
increased competition and threat of substitute products. These were the changes that
impacted most on commercial banks that participate in clearing house, given the
turbulence in the external environment. However, other mentioned factors could not be
ignored'in strategy formulation, as they constitute 20% of the impact.
The study further revealed that the commercial banks have adopted certain strategies to
counter the forces that impact upon them. The strategies include delivery of high quality
service, rationalizing delivery channels, segmenting the market, applying competitive
pricing structure, boosting the company's image and profile and having a presence in
appropriate locations. The underlying factor in the delivery of quality service was high
quality and appropriate technology that was responsive to the rate and magnitude of its
change. The key focus to the strategies so adopted is attention to the customer by being
sensitive to his/her needs, both actual and perceived.
Given the findings, the study's recommendations are that a heightened environmental
awareness should be adopted by organizations and quick responses be formulated to
respond to the challenges so detected. A much broader view than the immediate
environmental scan should be adopted which will help in forecasting possible trends,
given the global nature of business today. Time is of essence in formulating appropriate
strategies due to the global nature of competition and magnitude and speed of
technological changes. | en |
