Entry strategies used by Equity bank to expand into East African common market
This study was aimed at finding out the entry strategies used by Equity Bank to enter into EAC market. This was a case study of Equity bank where qualitative data was collected from the Equity bank group i.e. the strategic managers heading the regional branches and the strategic managers at the head office in Nairobi. All the respondents were middle to high level managers. There was a response rate of 75% where by 9 out of 12 targeted respondents responded to the interview guide. For the respondents based in Nairobi, Face to face interviews were conducted while for those based in Rwanda, Uganda and South Sudan mailing of the interview guide was done. The study was hinged on two main theories the theory of competitive advantage and internationalization theory. The study found out that though the EAC market seems similar in terms of the conditions spelt out in the EAC protocol, the business environment are dynamic and different in each and every country. It was found out that Equity Bank has a large branch network of about 217 operational branches in the EAC market with the largest branch network being in Kenya followed by Uganda and the least network in Tanzania. Business environment in the EAC market is both volatile and dynamic. Though some of the characteristics are shared across the countries such as low percentage of the banked population, adverse effects on the political environment and high levels of corruption in the government institutions, most of the environmental factor are different. Some of business environment challenges include high inflation rates that increase the lending rates, incorporation challenges, preference of the national banks as opposed to the foreign banks, low levels of economic development hence low propensity to save and low disposable income and above all political interference that occurs all the time that there is change of government regime. However, these business environments have also set opportunity for Equity bank to explore therefore the registered success in the EAC market. These include the EAC protocol, Elimination of tariff among the EAC markets, political stability experience in the EAC market in the recent past and for the Equity bank internal environment competitive edge of the bank such as strong capital base.Equity bank group has carefully studies the challenges in the EAC market and opportunities offered by the environment and come up with strategies that have facilitated entry into this market. These strategies are as dynamic as the market and are only duplicated in the market that can work with them. These strategies inclusion of the unbanked population in the banking sector, adoption of cost effective and reliable technologies coupled with high degree of risk management that ensure safe and efficient operations, diversity of credit ranging from small amounts to very large amounts, reduction of the cost of the loans such as the processing fees and offering low interest rates to clients. Continuously opening branches and doing market research for each market needs and strategic alliances such as Joint ventures and Acquisitions. Most of these strategies have worked well for the bank. Equity bank has the highest number of branches I a foreign market that has almost similar economic status share boundary and almost similar cultural values.