| dc.description.abstract | The Kenyan banking sector has experienced several challenges over time. The
government has implemented several reforms to enhance growth and competition in this
sector. To achieve financial stability and growth, it is important to identify the strategies
used by commercial banks in gaining competitive advantage. Currently, there is
competitive pressure in the lending market for commercial banks given lending as their
core activity. As a result, driven by the need to maximize profit, banks are likely to pay
great attention to lending rates that they charge. The objective of this study was to
identify the strategies used by commercial banks listed at NSE to gain competitive
advantage. Descriptive survey design was used for the study. The population for the
study was the 11 commercial banks listed at the Nairobi Stock Exchange. A total of 50
employees were targeted as study respondents out of which 48 responded giving a
response rate of 96%. Both primary and secondary data was used for the study. Primary
data was collected using a questionnaire while secondary data was collected from the
bank published records. Both qualitative and quantitative data analysis technique were
used to analyze the data. Quantitative data collected were analyzed using descriptive
statistics such as means, standard deviations, frequencies and percentages. Qualitative
data were analyzed thematically. The analyzed data were presented in form of tables, piecharts
and bar-graphs where applicable. The study found that Different strategies for
gaining competitive advantage were used by banks listed in the NSE where product
differentiation and diversification strategy was used to a very large extent and indicated
by 56.3% and 37.5% respectively. The findings also revealed that cost differentiation,
strategic alliances and joint ventures were neutrally used by bank listed in the NSE in
gaining competitive advantage as indicated by 29.2%, 43.8% and 31.3% respectively. It
was finally found that mergers as a strategy was used to no extent at all as indicated by
43.8% of the respondents. On the use of the strategies for gaining competitive advantage,
the study found that banks use credit diversification where loans are given to people in
different sectors of the economy (Mean score 4.13) to a very large extent. It was also
found that the respondents were neutral with the statements that banks offers lower
charges on client services making it attractive for many customers (Mean score 2.81) and
that banks forms strategic alliances with other organizations to gain competitive
advantage in the market (Mean score 2.69). The respondents further indicated that joint
ventures leads to the formation of strategic alliances making banks gain competitive
advantage to a large extent (Mean score 3.25) and that mergers helps banks in reducing
the cost of operation to a large extent (Mean score 3.75). Finally, on product
differentiation, it was indicated that banks diversify in different products making them
gain competitive advantage in the market (Mean score 4.69). The study concluded that
banks listed in the NSE use product differentiation and diversification strategy was used
to a very large extent in gaining competitive advantage in the market. It is recommended
that banks should provide excellent and unexpected customer experiences that will give
them a competitive edge in the market thus improving their performance. The study
finally recommends that another study be carried to assess strategies used by banks not
listed in the NSE in gaining competitive advantage in the market. | en_US |
