Strategic responses by chase bank Kenya Limited to environmental changes in the banking sector

Abstract

The banking industry must continuously adapt its operations to the constantly changing environment in order to succeed in business. Several changes have taken place in the world economies particularly in the banking industry. In order to survive in this dynamic environment, banks need strategies that are focused on their activities and deal with emerging environmental and industry challenges accordingly. Chase Bank Kenya Limited is a financial institution that is facing environments such as global and dynamic. Within a span of two years, financial institutions with a heritage of one hundred years have either ceased to exist or been acquired by more adapt players thanks to the current global financial crisis. This crisis is bringing unprecedented change to the financial services industry irrespective of organization size, focus or geography. This study is set up to establish the responses being utilized by Chase bank in the face of increasing environmental changes and industry forces. The first objective of the study was to determine how Chase bank has responded to changes in the environment. These are: technological, economic, political and social factors. The second was to determine how Chase bank has responded to changes in the industry forces. Theses are: threat of entry, threat of substitute product, bargaining power of buyers, bargaining power of suppliers and competitive rivalry. According to the study, the bank has been influenced by various factors which were identified as being facilitators or challenges. The notable facilitators unique to the bank were; strong customer relations with recognition, open, dynamic, youthful and energetic culture, competitive foreign exchange pricing and branch network which is attractive to the High Net Worth individual. The documented challenges are the cumbersome and complicated banking system, low brand awareness in the market, increased competitive rivalry, entrance of new more dynamic players into the local market and market volatility. Chase bank has managed to be successful thus far in managing environmental challenges due to the open-minded attitude of the management and thus strategic responses to these changes. The future of the business will depend on how well the bank is able to adjust their business operations to the volatile environment. The research suggests a study to find out how the firm vi formulates these strategies, specifically to determine factors which influence the choice of strategies within the organization. From the study, it is clear that Chase Bank recognizes the fact that it is working in a dynamic environment. It also realizes that for it to sustain good performance, it has to continually make changes so as to adapt to the environment. The firm sees the need to delight its customers by satisfying their needs and exceeding their expectations. The firm has chosen to adopt a proactive posture.