Response of National Bank of Kenya to competitive forces in the banking industry

Abstract

The objective of the study was to establish response strategies adopted by NBK to changing industry forces. Tn order to meet this objective, the pertinent primary and secondary data was collected. Primary data was obtained from personal interviews with the respondents who were responsible for developing the strategic responses by NBK to the competitive forces in the banking industry. Secondary data was collected from various sources including the strategic planning manuals, annual reports and periodic bulletins of the bank. The data was then analyzed qualitatively The study established that the competitive forces in the banking industry have posed challenges to NBK and have thus called for the appropriate responses. These challenges arose from the interplay and presence of all the porter's five forces in the banking industry. These forces are: the threat of new entrants, threat of substitute products, the rivalry within the industry. the bargaining power of suppliers and the bargaining power of customers. According to the research findings, NBK has responded to the competitive forces through restructuring, aggressive marketing, information technology, and culture change among other responses. Most of the respondents Celtthat NBK has the necessary resources and capabilities to effectively respond to the competitive forces and achieve a sustainable competitive advantage in the industry. The study was based on the response of NRK to the competitive forces in the banking industrv. Alternatively. a cross-sectional survey covering all banks in the industry to determine the strategic responses to these forces by the banks generallv could be undertaken. This then will allow for industry generalizations to be made.