Strategies of new ventures entering the banking industry in Kenya as implemented by Gulf African Bank Ltd

Abstract

Kenya has witnessed new ventures and companies being established over the last few years. The success of entry into a new market is not an easy task and not all potential entrants succeed in entering new markets or industries that have strong players. This requires proper planning in arriving at the best option of entry into the market while laying out key strategies for successful entry

The study sought to determine entry strategies of new ventures in the banking industry in Kenya by examining the entry strategies of Gulf African Bank. Gulf African Bank is Kenya's first fully Shari'ah compliant bank offering products that address not just Muslims, but everyone in the country. The bank was established as a new bank in 2007 and opened its doors to the public in January 2008 and has been in existence for the last three years. The bank is promoted by premier and well-respected Gulf-based institutions along with prominent institutional and individual investors from Kenya

The research was a case study of Gulf African Bank. The objective of the study was to determine the entry strategies adopted by Gulf African Bank in entering the banking industry in Kenya. The researcher found out that the bank has established a niche market by initially concentrating on the muslim population and working to compete using specialised products and is considered the leader in Islamic banking. The bank has a set of unique customers drawn mainly from areas dominated by the muslim community. The researcher established that the bank has differentiated its products in a unique way by riding on establishment of 'a fully shariah compliant Islamic institution with all the products being compliant with the shariah guidelines.

The bank adopted a calculated entry into a specific defined market and has used a sizeable amount of resources. The resource capability available for the bank necessitated a narrower entry approach as opposed to other banks whose resource capacity justified a frontal attack that targets the whole market from the onset.

This non-aggressive and focused strategy necessitated the bank enter the market and establish itself, laying the groundwork for further expansion. Particularly this approach has given the bank a foothold without major alarm to the competitors. The researcher also recommends that the bank engages in consolidating the gains made by enhancing and protecting the core aspects of its business which is offering fully compliant products and emerging as the premier islamic bank.