Diversification Strategy Used by Commercial Banks in Kenya as a Means of Gaining Sustainable Competitive Advantage

Abstract

Strategy has been a game which has been put forth by banks to ensure they are ahead of the pack. Diversification as a strategy has meant that organizations make use of existing resources to expand the business into new frontiers and expand the profitability of the organization in leaps and bounds. This study sought to investigate the use of diversification strategy by commercial banks in Kenya as a means of gaining sustainable competitive advantage. The paper established that achieving competitive advantage is possible whenever banks roll out new products and services. However, sustaining competitive advantage calls for the banks to ensure their diversified products are well thought out and that the decisions and resources employed to arrive at these products and services are unique, rare and are not easily replicated by competition. The study further discovered that innovative ventures arrived at by banks through the use of technology especially when building key alternate channels of business will last and are likely to result into better and more guaranteed return on investments. This study is anchored on the game theory, and industrial organization theory