| dc.description.abstract | Banking sector plays a significant role in the growth of economies all over the world. The
objective of this study is to determine the challenges that KCB is facing in selecting
international markets and the modes of entry into International markets. The study is a
case based and utilizes both primary and secondary data collected from the Bank's staff
and documents respectively. The study targeted all the managers in the Finance and
Strategy Division of KCB, Head of Subsidiaries and all the managers in the various
regional markets to undertake feasibility studies. The primary data was collected using a
structured questionnaire that was mailed/faxed to the target respondent.
The data was analyzed usage statistical package on social Sciences with the help of
descriptive statistics and content analysis. In selecting International markets, this study
found that the greatest challenge KCB had to contend with was access to government
restriction, profitability, general risk and yield of the potential market.
Major findings show the strategy being pursued by the bank is market development and
the preferred mode of entry is registration of fully owned subsidiaries which KCB
management refers to Greenfield (or fresh start up). The reason for KCB's regional
growth strategies are attractive regional market, desire to follow competition and
customers, grow market size, inducement by host governments, reduction of operational
costs, desire to boost corporate image, answer needs, namely reconstruction of formerly
devastated infrastructure and meet that demand for banking services, take advantage of
harmonized tax regime, tap new opportunities, leverage on the regional integration and
free trade frontiers, to stay ahead of competition and grow shareholder value.
Despite the fact that the banking industry is liberalized very fast, banking is still bound by
many regulatory tendencies that hinder banks from venturing into International markets
at a faster rate. Assessing the general risk of an entry mode and contribution of an entry
mode to give the bank a competitive edge in terms of increasing market share were the
greatest challenges that KCB faced in choosing a mode of entry. The researcher
v
recommends that banks conducts thorough evaluation of their long term strategic
orientation that would lead to design and development of meaningful strategic alliances
for that is the only way they could overcome these challenges. The study found out that
factors that have affected the regional growth strategy are tough expatriate workers
policies, low labour quality, legal complexity, delay in processing of licences, fragility of
legal and regulatory framework, poor infrastructure, inferior brand perception, high cost
of doing business, high staff turnover, uncertainty in peace agreements, political risks and
suspicions, | en |
