Competitive positioning of KCB in the Kenyan banking industry with realignment of its mortgage subsidiary S&L into the main bank operations

Abstract

All organizations operate in an environment which influence the way they operate. In this age and time organizations have to understand the competitiveness in its industry and identify the best strategy that would give it an edge over its competitors. For an organisation to continue to achieve their goals and overcome the operating environmental turbulence it is imperative to constantly scan the operating environment and develop response strategies aimed at overcoming any adverse effects of such turbulence.

The banking industry is very competitive. The property industry has been experiencing a lot of growth in the recent past this has attracted a lot of banks venture into Mortgage business examples include Equity bank, Co-operative bank, Consolidated bank, Gulf African bank. There is a lot of optimism and anticipated business opportunity in the property market.

The research was a case study of Kenya Commercial bank Limited (KCB). The study focused only on the realignment of S&L the KCB mortgage subsidiary into the main bank operation KCB to attain a competitive position. The research respondents were the KCB top management. The study had two objectives; To establish the competitive position of KCB in the banking industry with realignment of its Mortgage Subsidiary S&L in to the main bank operations and to establish the challenges facing KCB with increased competition in the banking industry.

In an effort to meet these objectives the pertinent primary and secondary data was collected. The primary data was collected from personal interviews with the respondents who were responsible during the planning and implementation of the realignment of S&L into the main bank KCB operations. The secondary data was collected from various sources.

The data was analyzed using content analysis. The study established that the Kenyan banking industry has grown tremendously. With this expansion of the industry in terms of the providers of the banking services KCB has had to review its operations in order to attain a competitive position in the banking indu stry. The substitute bank products have flooded the market. There has been an increased exposure of the consumers of these bank products with the high levels of education hence customers are more informed and know their rights.

This has enhanced the power of buyers pushing KCB to remain continuously innovative on its set of products to suite the customer needs. KCB strategic responses are now very much influenced by the prevailing market condition, customer needs and expectations. There has also been a continuously increasing demand for properties in the Kenyan market.

The study established that this increased property demand posed a lot of challenge for KCB to position itself well and grow its business through selling the Mortgage product. This is backed by S&L which was a fully owned subsidiary of KCB and had unique capabilities in mortgage lending business. A study can be carried out on the strategies employed by other players in the banking industry to achieve a competitive position in the banking industry. The study can be in the context of the increased property demand and how banks can position themselves to tap into the mortgage business.