Alternative Banking Strategies Applied by Commercial Banks in Kenya to Develop Competitive Advantage

Abstract

The purpose of the study was aimed at establishing the alternative banking strategies applied by commercial banks in Kenya with respect to developing competitive advantage. Over the years the revolution of Information technology has consistently made steady inroads into the banking institution in the world economy. An extensive search for suitable strategies to be adopted by organizations for growth and survival in the changing and turbulent market place has thus become inevitable (Al-Mansour, 2007). The study was conducted using cross sectional survey design. The population of interest for this study comprised all 43 commercial banks of Kenya. Primary data was collected using questionnaires which were administered through 'drop and pick' method and respondents targeted were the corporate strategy managers or marketing managers of the banks. Data analysis was by use of descriptive tools of analysis. The findings of the study indicated banks are operating in a dynamic business environment and thus the researcher recommended the need for the commercial banks to always be a step ahead in terms of being very current and move according to the changing technology because everybody and everything is moving with the pace and failure to that it will lead to low or no competitive advantage. The researcher also recommend as a result of the findings that banks should adopt new technologies through alternative banking channels within the banking sector so as to improve their level of competition. This is because technology makes everything easier, quicker and effective. On the findings on the challenges that banks face while investing and implementing the alternative banking challenges the researcher recommends that banks should have adequate capital before making the decision on implementing the various alternative banking strategies. Banks also need to continuously carry out research on customer needs and combine the various alternative banking strategies so as to gain competitive advantage.