The strategic responses to external environment changes by issuers of credit cards in Nairobi

Abstract

Organisations need to continuously identify opportunities in the business environment and adapt their resources and competences so as to get maximum advantage. The organisation exists in an environment which consists of complex commercial, political, economic, social, technological and legal aspects that may give rise to opportunities or threats to an organisation. The study sought to identify the environmental changes that impact on credit card companies in Nairobi and to establish how the credit card companies had responded to these variations. Towards meeting the above objectives, relevant primary and secondary data was collected from respondents companies and through desk research. A response rate of 67% was achieved with a total of 10 out of 15 credit card issuers responding to the survey. It was established that environmental changes including an economic slump, political instability, lack of a proper legal framework governing the business and lower than desired uptake by society had posed a challenge to the business. The credit card issuers have responded to the changing environment through embarking on marketing programs, redefining their prospective customer base, putting more resources behind the business with respect to capital and personnel, investment in information technology by installing more point of sale devices and restructuring the business such that the credit cards become a separate business unit. As a result of the research findings it was recommended that in a changing environment it was critical that credit card issuers responded strategically so as to remain relevant to consumers and counter increasing competition from other companies in the industry who are increasingly focusing on the business.