Operational strategies and competitive advantage in the commercial banking sector in Kenya

Abstract

Today’s environment is often turbulent. Stalk et al (1992) argue that competition in such environment is becoming less like a game of chess and more like an interactive video game where competition should be treated as a “war of movement” with successful companies moving quickly in an out of products, markets and sometimes even entire business. In order to gain competitive advantage in this turbulent business environment companies are constantly being encouraged to make the transition to the latest management prescriptions, panaceas and theories which come and go rather like waves on a beach. The objective of this research was to establish the link between operational strategies and competitive advantage in the commercial banking sector in Kenya. Descriptive survey was used as the best strategy to fulfill the objectives of this study.The population of study consisted of all the 43 commercial banks that are dully registered with Central Bank of Kenya as at 31st December 2010. Questionnaires were randomly issued to the senior managers, branch managers in the organizations under study. The questionnaire were administered by the researcher through direct interaction with the respondents and explained the motive of the study and purposes of creating rapport that were facilitated to carry out of interviews with these respondents. Data collected was analyzed by descriptive analysis. Tables and charts were used to summarize responses for further analysis and facilitate comparison.From the study the researcher concludes that for banks to achieve the desired competitive advantage clients needs to be addressed to combat what clients have gone through like experienced inconsistent application of procedures in the branch The researcher concludes that to achieve success in the finance sector it is important to be enthusiastic, have competent/knowledgeable staff be at a convenient location and have convenient banking hours, this will be made easy by having simple systems and procedures in the bank. The study recommends that the institution in specific Kenya commercial banks should ensure all transactions are well planned, follow a given system to achieve the desired competitive objectives by following the three basic types of capital resources to provide the firm with competitive advantage i.e. physical resources, human resources and organizational resources. Physical resources include the firm’s plant, equipment and finances. Human resources include intellectual property, knowledge of business processes and tacit knowledge, skills, judgment and intelligence of the firm’s employees; and organizational resources include the firm’s structure, planning, controlling and coordination (Barney & Wright, 1998).