Application of porter's generic strategies by commercial banks in Kenya

Abstract

The study sought to investigate the application of Porter's generic strategies by commercial banks in Kenya. The study targeted all the 42 commercial banks operating as at the time of the study. Out of the 42 commercial banks, 20 responded constituting 47.6% response rate. The data was collected using a structured questionnaire which was administered using the "drop and pick later" method. The data collected was analyzed by use of statistical package for social sciences (SPSS) presented in form of percentages, frequency tables and other descriptive statistics such as mean and standard deviation. The study concludes that 60% of the commercial banks use Porter's generic strategies. Of the respondents, 40% applied differentiation, 15% applied focus while 5% applied cost leadership. A further 40% of the commercial banks were stuck in the middle implying that that they fail to develop their strategy in at least one of the three directions as proposed by Porter.