Growth strategies adopted by Eco bank Kenya Limited

Abstract

Growth means change and proactive change is essential in a dynamic business environment Growth must be broadly defined, although the Product Impact Market Studies (PIMS) have shown that growth in market share is correlated with profitability other important forms of growth exists i.e. growth in the number of markets served, in the variety of products offered and in the technologies used to provide goods or services. A growth strategy can be defined as a tactic used by management to expand the consumer market for company’s product. In order to search for expansion opportunities in the environment organizations use growth strategies. According to Pearce and Robinson, (1997) growth strategies are comprehensive approaches guiding the major actions designed to achieve long term objectives. The banking industry is a very competitive one with many local banks coming up with strategies to grow in order to overcome the competition brought about by the environment. Eco bank is among the banks in the industry and over the past four years we have witnessed the bank grow and overcome a lot of competition to become one of leading bank in the country. The objective of the study was to identify the growth strategies adopted by Eco bank and challenges relating to growth that Eco bank is experiencing. Primary data was collected using an interview guide to the directors and heads of functions at the bank that totaled to seven. Eco bank annual reports were also used for Secondary data. Content analysis was then used to analyze the data. Findings from the study saw that Eco bank used a number of growth strategies. Bank used Mergers with EABS enter the local market in 2008.Market development strategy where the bank has been able to venture into different markets segments within the country by introducing products to cater for each segment. Product development strategy has been used by improving on the already existing products, adding value added benefits and introducing new products within the market. Partnership and alliances, Eco bank has partnered with KPLC and Safaricom among others mainly to improve on services offered to customers. Several challenges were encountered in the pursuit of growth some of which included high cost of advertising, challenges faced when venturing into jurisdictions i.e. legal and regulatory requirements. Some of the limitations of the study were due to the fact that Eco bank is not listed in the Nairobi stock exchange that means most performance result is not in the public domain. This was a challenge as some senior managers felt some of the information should be left behind their closed door. They viewed the exercise with a lot of suspicion due to the stiff completion in the banking industry. Eco bank been a multinational bank, it was not possible to interview most functional head within the time frame planned since they travel a lot .The study wishes to recommend further research of the critical success factors for the implementation of growth strategies. This is because the research came across various other challenges and factors affecting growth of Eco bank Company in the course of study. Further studies should be done on the strategy formulation, implementation and evaluation of growth strategies in other companies and industries