Strategic Alliances Among Commercial Banks in Kenya

Abstract

The banking industry plays a very crucial role in the Kenyan economy. As the world business environment changes it is vital that businesses including the commercial banks adapt to these changes in order to survive and achieve their corporate objectives. Mergers, Acquisitions, Strategic Alliances, and Joint Ventures are just some of the ways companies can be guaranteed of continued development, profit and success. However, no amount of these four would be enough if the company could not even begin to take care of its customers. Customers are not only always right; they also hold the money to keep companies running. The objectives of this study were first to establish the major drivers of strategic alliances in the banking sector in Kenya. The other objectives were to establish the benefits and challenges of strategic alliances in the banking sector in Kenya. Literature review was gathered from various sources with more emphasis on more current literature from renowned authors in strategic management. The research design used was a descriptive survey design. The data collection tool used was a questionnaire with closed and openended questions guided by the contents of the literature review and aimed at achieving the set objectives. The study revealed that mergers were the most popular form of strategic alliance in the banking industry in Kenya. The major motives for strategic alliances were profit and revenue maximization as well as gaining a competitive edge. The study recommends that the banks venture in non-aligned partnerships in order to diversify and spread risks.