Application of Porter's model of competitive advantage of nations to the internationalization of Kenyan banks
Mwangi, Ephantus J
MetadataShow full item record
The study sought to establish whether the factors identified by Porter in his model of competitive advantage of nations apply to the internationalization of the Kenyan banks. The factors identified by Porter as influencing internationalization were put to the respondents to indicate how each factor has influenced movement to foreign market. Additionally all factors that have been identified by various scholars as influencing internationalization were measured the extent of their influence. Then all the factors are analyzed to measure their level of influence. Many studies have focused on strategies and factors that influence foreign market entry; none has focused on the strategies as envisaged in Porter's model of competitive advantage of nations. The results of the findings have revealed that the most important factors in influencing whether to invest in the international markets include the company vision & policies, revenue/profit maximization, domestic competition and leadership enthusiasm. Others include infrastructure, demanding customers, research & development and spreading of risks. The government policies were also considered to be very important factor in influencing investment in foreign markets. The results also revealed that following competition was perceived to be of little importance in influencing foreign market entry. Management structure and natural resources were also perceived to be of little importance in influencing the internationalization of Kenyan banks. Cost reduction as a factor that influences internationalization was not perceived to be of high importance contrary to the popular belief. From the findings it is clear that factors in the Porter's diamond of national advantage influences the internationalization of Kenyan banks. It is however clear that in the diamond the firm strategy, structure & rivalry is the most important factor followed by factor conditions and demand conditions respectively. The findings also established that related and supporting industries was perceived to be of little influence in determining movement to the international markets by Kenyan banks.
University of Nairobi, Kenya