INFLUENCE OF COMPETITIVE STRATEGIES ON ORGANIZATIONAL PERFORMANCE OF KENYA COMMERCIAL BANK
Rosalia Nthambi Kinyungu - Master of Business Administration, Jomo Kenyatta University of Agriculture and Technology, Kenya
Dr. Kennedy Ogollah - Jomo Kenyatta University of Agriculture and Technology, Kenya
ABSTRACT
The banking industry has grown tremendously the last few years. Technology and the increasing needs of customers has forced the industry players to come up with strategies in order to meet their customer needs in an efficient and costs effective manner. This is important in enhancing organizational performance especially in a competitive market environment. Banks in Kenya face the challenges of fluctuating demand and stiff competition from other financial institutions such as Saccos and MFIs and also an upsurge in the number of commercial banks in the country. Banks have a daunting task of making sure that they receive a large number of customers who will also use word of mouth to market them to other customers. Many commercial banks in Kenya have not attained the status of excellence they desire for quality of service. The purpose of this study was to determine the influence of competitive strategies on organizational performance at Kenya Commercial Bank. The study was hinged on resource-based view, knowledge-based view, capability-based view and the Neo-Institutional Theory. Literature was also reviewed on each of the study variables. A descriptive survey was used for this study. The population for the study consisted of all the branches of Kenya Commercial bank in the country as at 31stDecember, 2015. KCB has 177 branches throughout Kenya, making it the largest banking network in the region. Convenience random sampling was used to select the 30 branches in Nairobi. The primary research data was collected from the respondents using a questionnaire. The data was then analyzed using descriptive statistics using statistical package for social sciences (SPSS) version 21. In addition, a multivariate regression model was applied to determine the relative importance of each of the four variables with respect to organizational performance. Data was presented in tables, charts and graphs. Based on the research findings the study concludes that cost leadership strategies have a great influence on performance of KCB in Kenya Commercial Bank. The study also concludes that market focus is very important strategy in influencing performance of Kenya Commercial Bank. The research further concludes that differentiation as a competitive strategy implemented by Kenya Commercial Bank contributes significantly to its performance. The study also concludes that product innovation strategies affects performance of KCB to a moderate extent. The study recommends that Kenya Commercial Bank particularly should create marketing departments.The study also recommends that Kenya Commercial Bank should aim at achieving above-average returns over competitors and also improves its performance through monitoring the costs of activities provided and maintaining low charges on services offered. Since customer’s tests and preferences keep on changing, there is need for Kenya Commercial Bank to study the market to understand what the customers want and change with the changing times.
