Adoption of blue ocean strategy by commercial bank of Africa limited, Kenya

Abstract

A well formulated strategy enables an organisation to marshal and allocate its resources in a unique way on the basis of relative external competences and limitations so as to achieve competitive advantage (Pascale, Steenkamp & Millier, 2000). The management risk relevant to strategy execution is greater in the blue ocean than in Red Ocean, because its execution often requires significant change. The study focused on the adoption of blue ocean strategy by Commercial bank of Africa limited. It assessed the blue ocean strategies adopted by Commercial bank of Africa limited. The study adopted a case study design. The findings were obtained using an interview guide that was administered personally by the researcher. There were seven managers available at the time of the study. Demographic profiles established that the majority of managers were male. The study established that the managers perceived blue ocean strategy as a useful tool in the management of the banking operations and had positively impacted on the cost, operations and timely completion of set financial targets. The study also established that Commercial bank of Africa limited indeed had adopted blue ocean strategy. However, most managers at the bank did not even have a clue of what a blue ocean strategy means. The study found out that the services designed by the bank have an element of class and service excellence with an emphasis to personalized services. The study specifically identified some products that are practical examples of the blue ocean strategy implementation by the bank. The particular services added value. made competition irrelevant and created uncontested market space. The respondents mentioned the leverage on Information Technology; especially the new core banking software as the backbone of value addition. The study recommended that there is need to fully entrench the blue ocean concept by ensuring that managers are well trained on blue ocean strategy. It further recommended that the government should come up with stringent policies to curb unfair and unethical competition or market practices in the banking sector. The study was limited by the fact that it only focused on one bank and therefore its findings may not be applicable to the entire banking sector. While the managers at Commercial Bank of Africa perceive blue ocean strategy as being instrumental in streamlining operations in the banking sector; further research should be conducted to establish whether there is a correlation between blue ocean strategy adoption and performance of firms in Kenya.