A study of strategic alliances in Kenya: The case of money transfer Services

Abstract

Organizations are becoming less self-sufficient and their survival largely depends on successful strategic alliances and co-operation with others. As a result, the number and pace of strategic co-operations between firms in the Money Transfer Services (MTS) are increasing significantly and managers in this field, directly or indirectly, are facing issues related to strategic alliances.

The main objective of the study was to establish what factors firms consider when entering strategic alliances and the factors leading to success, sustainability and prosperity. Factors leading to failure were also established. The study focused on the banking sector as at the 31st June 2007 and comprised a population of 15 firms involved in strategic alliances out of over 50 registered banks. Random sampling was applied. Structured questionnaires with appropriate questions were delivered both physically and or by email. Follow-ups were done by email and the phone. The methodology used to analyze data was by descriptive statistics - by rating the importance of the variables studied using the percentages, the mean and the standard deviation.

The study found out that firms consider prospect for growth both in market share and productivity, partner match, strength of competency and history of the prospect partner as key factors when entering strategic alliances. Increased trust, a suitable partner, goal congruency and commitment are factors leading to strategic alliance success while inappropriate partner, goal divergence, opportunism, and poor vision can wreck alliances. Due to the role of MTS in the economy, there is need to manage and steer strategic alliances into success, sustainability and prosperity.