Strategies Applied by Mortgage Providing Banks Quoted at the Nairobi Securities Exchange (NSE) to Gain Competitive Advantage

Abstract

Strategy, which is a fundamental management tool in any organization, is a multi-dimensional concept that various authors have defined in different ways. This research was undertaken in order to understand the strategies as well as to determine the factors influencing the choice of strategies applied by the major mortgage providing banks quoted in the Nairobi Securities Exchange (NSE) to gain competitive advantage. The sampled banks were the major mortgage providing banks in terms of the value and number of mortgages as at 31 December 2012. Data for the study was collected from both secondary and primary sources. The source of the primary data was from the semi-structured questionnaires while the secondary data was sourced from a critical review of existing literature. The research findings showed that mortgage offering banks have in place short term strategies which are reviewed depending on the mortgage industry status which the management of the organizations is well versed with. Further the banks experience challenges in the implementation of the strategies are as a result of the following financial strength, competition, leadership/management, lack of good product innovation and client diversification. However from the review of the sampled banks responses we note that the banks have adopted the product re-engineering or innovation and industry lobby or sourcing for external investors in order to mitigate the challenges in the implementation of the strategies with the view of gaining competitive advantage.