Factors Affecting Kenya Commercial Bank as an Outward Foreign Direct Investment

Abstract

The purpose of this study was to establish the factors affecting KCB Bank Ltd as an outward FDI. This study sought to answer the question of why the bank has been successful as a regional bank and what challenges the bank has faced in its regionalization strategy. This study is of significance to other banks that may have interest in expanding regionally since they can learn from KCB. This research adopted a descriptive case study approach to determine the factors affecting KCB as an outward FDI in the eastern African region. The study used primary data which was collected through interviews. The Kenya Commercial Bank Ltd officials interviewed included the head of marketing, head of operations, head of human resource and head of finance. Content analysis was used to analyze the data collected. The study findings indicated that KCB is a successful outward FDI due to many factors including being a first mover, leading-edge management practices, adapting to local market conditions and incorporating experienced local managers in subsidiary operations. Following the findings, companies seeking to invest in other countries other than their home country should use strategies which aim at tailoring existing products to better fit the needs of market they seek to target. Secondly, FDIs should give some form of autonomy to their subsidiaries such that they can be able to make some crucial decisions mostly in marketing and product development. Finally, host countries should make their countries attractive such that many FDIs should invest in them to bring advantages that are associated by such investments.