A survey of the competitive strategies adopted by credit card providers in Kenya

Abstract

The single most important goal for any firm is achieving competitive advantage. Managers have overtime pondered why some organizations have been able to have a competitive advantage, while others have not. Without proper strategies in place firms may never live to secure a competitive edge over their rivals. Although in many organizations especially in Kenya identification of the sources of competitive advantage has become an increasing priority, the areas of strategy formulation and marketing in the credit card industry have made considerable step towards a comprehensive development of competitive strategies that can indeed provide advantage over competitors. This study was guided by two objectives; to establish the competitive strategies being employed by credit card industry in Kenya and to determine the challenges facing the implementation of strategies within the Finn and in the industry. Descriptive study was employed in this study where both qualitative and quantitative methods of data collection were used. It targeted 9 commercial banks dealing in credit cards with 9 respondents one from each bank being interviewed. A self-administered open and closed ended questionnaire was employed in collecting primary data from the field. Tn addition, in depth interviews and desk research were used for confirmation and verification. Data collected from the field was analyzed mainly using descriptive analysis method, and information presented in charts, frequency distribution tables and figures. This research documented that both generic and- grand strategies are being employed by commercial banks as they strive to outdo each other in this competitive market. However, a number of challenges also hinder the success of the credit card industry in Kenya; these challenges are both within the banks and [he industry as a whole. Challenges such as lack of staff training, huge capital requirement, distribution cost and the inability of commercial banks 10 market their products are specific to commercial banks. The challenges facing the industry are; lack of credit card culture in Kenya, poor communication and restrictive policies. This study recommends further research in future to be carried out to determine the dimension of competition in the industry and establish if there are other strategies at play other than generic and grand strategies. It also suggests an investigation to be done on what other factors may determine the success and failures of competitive strategies in the banking industry as a whole. Lastly a more detailed analysis of competitive strategies in other industries is also necessary in order to determine their contribution to competitive advantage.