Analysis of competitive strategies adopted in internationalization process of local business firms in the banking industry. a case study of Equity Bank Kenya Limited

Abstract

International business describes all commercial transactions taking place between two or more nations and across national borders. The rise of globalization presents a number of important challenges to a business seeking international presence. Numerous strategic aspects must be taken into account prior to commitment at an international level, and afterwards. Constant flexibility is required to adapt to changing patterns at local, regional and international levels. Strategies define how an organization will use its resources to gain competitive advantage in the larger environment. Strategic formulation and management process analyses business opportunities and threats, internal strengths and weaknesses or resource gaps, current values and management philosophy. Organizations success in its operation is dependent on how it formulates and pursues strategies that take advantage of external opportunities, minimize the impact of external threats, capitalize on internal strengths and mitigate internal weaknesses. A local company intending to expand operations into international markets must build on the right competence to be relevant in the international market and must understand the priorities of their target markets with challenges involved into the international market environments and in response, develop strategies that would make it a recognizable player in the international arena. This project study sought to identify the competitive strategies adopted and supporting factors in internationalization of local business firms in the banking industry, using Equity Bank Kenya Ltd. as a case study. Interviews were used for primary data and supplemented by secondary data from bank library and websites. In conclusion, the analyzed data identified Duplication of Business Models Strategy, Market Dominance Position strategy, Mode of Entry Strategy and Opportunism on Government Policies Strategy as the major competitive strategies that the firms employ to ensure successful internationalization process. The research further identified that the underlying factors that influence above strategies to be applied during internationalization process are; banks unique business model with unique market niche, financial back up or support from parent company, organizational structure, corporate strategies and financial strengths and available partnership with world recognized financing bodies. The study recommended further research into the areas that presented limitations during the present study. Further study is recommended on other internationalizing banks because the competitive strategies are unique from one organization to the other. This will remove any possible bias arising when concluding on entire banking industry