Factors influencing strategy choice in Commercial banks in Kenya

Abstract

ABSTRACT For a firm to enjoy above average profitability, it must set activities that will enable it reach its goals and more so adopt new ideas and ways of doing business that can guarantee survival. As the business environment becomes more uncertain and dynamic, the major challenge for managers is to choose a competitive strategy that is flexible enough to adapt to the changing environment and implement it at the right time. To achieve the objective of the firm, factors that influence the choice of competitive strategy should be clear and well understood. Therefore, the effective choice of competitive strategy is a central focus for the commercial banks in Kenya. The purpose of the study was to identify the strategies adopted in commercial banks in Kenya and to determine the factors influencing strategy choice in commercial banks in Kenya. The study adopted a descriptive survey design. The population of this study will comprise all commercial banks in Kenya. The study adopted primary data collection sources. Self-administered questionnaire designed specifically for the study were the key data collection instrument. Data collected was purely quantitative and it was analyzed by descriptive statistics. From the findings the study concludes that the bank considers needs of a specific market as very important when choosing how to compete. It also deduces that the banks build a positive reputation within the industry for market leadership and employ highly qualified and experienced marketing staff. Finally, the banks consider products differentiation in the strategy choice as the banks products are unique in the market and banks invest in product research and development for competitiveness. The study recommends that banks should consider price of the product offered as very important when choosing how to compete. Further, in order to enhance their competitiveness and serve the clients well, the banks should have access to inexpensive capital from external sources. The banks should also produce products and/or services for high price market segments.