The Effect of Credit Risk Management on Value of Commercial Banks Listed at Nairobi Securities Exchange

Abstract

In light of Kenya's changing financial environment, this study explores the dynamic relationship between innovation strategies and commercial banks' competitive advantage. Businesses, especially those in the financial sector, must innovate to be competitive in an era marked by rapid technological breakthroughs and shifting customer demands. This study evaluates the various aspects of innovation, including product, service, process, and business model innovation, in order to gain an understanding of how innovation affects competitive advantage. It does this by drawing on prominent frameworks like the Technology-Organization-Environment (TOE) and the Resource-Based View (RBV). With an emphasis on the Kenyan banking sector which stands out for its proactive innovation adoption, the mobile banking revolution, and a regulatory framework that promotes financial inclusion, this study investigates the connection between innovation strategies and competitive advantage. Using metrics including the volume and kind of innovation, innovation capacities, and regulatory effect, this research provides detailed insights into the tactics commercial banks use to maintain their competitive advantage. Furthermore, by examining the uniqueness of innovation methods used by domestic and foreign banks operating in Kenya, this study closes conceptual, contextual, and research gaps while illuminating the disparities in their methodologies and effects on competitive dynamics. The study's conclusion answers the main research question, ‘How do innovation strategies impact the competitive advantage of commercial banks in Kenya?’ and offers insightful advice on how to manage and use innovation for long-term economic growth and competitive advantage to academic institutions, commercial banks, and policymakers.