Mergers and Acquistions as an Entry Strategy by Cfc Stanbic Bank in the Kenyan Market

Abstract

The purpose of the study was to determine how mergers and acquisitions were used as an entry strategy by CFC Stanbic bank in the Kenyan market. The research design used in the study was case study. The researcher used interview guides as the main data collection instrument from the sampled employees at the company. The study targeted 9 employees in the management levels of the company. A qualitative content analysis was employed to analyze the respondents’ views about mergers and acquisitions as an entry strategy by CFC Stanbic bank in the Kenyan market. The data was then coded to enable the researcher to make explanatory assertions. The study found out that there arevarious factors affecting the use of mergers and acquisitions by CFC Stanbic bank in the Kenyan market including cultural differences, geographic differences and differences in valuation. The study also found out the advantages and disadvantages of using mergers. The advantages include increased market share, reduced competition, higher profits, economies of scale, buying in bulk which brings higher discounts, greater investment in R&D, greater efficiency and protecting companies from closing down. The disadvantages include diseconomies of scale if the company becomes too large, making employees redundant which may affect the level of motivation, clashes of culture and conflict of objectives of between different businesses making decisions hard to make.