Challenges of implementing the segmentation strategy at the Co-operative Bank of Kenya Limited
The study was on the challenges faced by companies In the implementation of the segmentation strategy. The research was undertaken using the case study method with a focus specific to the Co-operative Bank of Kenya Limited. The study covers the basis on which the bank has segmented its target market and the challenges that the management has faced in the process of implementing the segmentation strategy. Primary data was obtained using the personal interview method and supplemented by secondary data obtained from relevant publications. Analysis of data was done using the content analysis methodology. Presentation of the findings from primary data IS In qualitative form and is supported by secondary data presented in quantitative form. The findings of the study were that the bank has segmented its target market into three broad segments on socio-economic basis. The segmentation is based on type of borrowers specifically focusing on potential borrowing needs and level of social involvement they demand. The three segments are retail banking, corporate banking and SACCO (Cooperatives) banking. Further the study confirms that the implementation phase of strategy is in fact longer and more challenging than the planning phase. The main challenges that were articulated included inadequate resource capacity, increased risk of ignoring potential audiences, resistance from the market, cannibalization of existing markets, inefficient resource utilization and increase in costs. The findings of the study indicate that it is important for organizations that intend to implement a response strategy to carefully anticipate the effects of implementation of the strategy during the planning stage. This will prepare them for the various ripple effects of implementation. This notwithstanding, the management should also be aware that there may be effects that emerge as the environment responds to changes in the organization's strategy. Some of these responses by the environment are outside the control of the organization and cannot be accurately anticipated by the management. This will require the organization to be flexible in order to adapt to emerging changes as a result of the interaction between itself and environment. Nevertheless, implementation of the segmentation strategy has fast-tracked the growth of the company and resulted in measurable benefits such as growth in size, market share and profitability. As such, the management of the organization is vindicated in making the decision to implement the strategy as a response to the changing environment.