Effects of Merger Strategies on Competitiveness in the Banking Industry: A Survey of Selected Banks in Kenya

Abstract

The prevailing competitive market situation has presented the banking industry with a myriad of challenges over the last few years. As a result many banks are reviewing the strategy they should adopt to ensure future competitiveness. Banks are currently pursuing a mix of strategies in a bid to enhance their competitiveness in the industry.This research sought to establish the effect of merger strategies on competitiveness in the banking sector in Kenya. The study specifically focused on establishing the effect of revolution strategy on competitiveness in the banking sector in Kenya, to evaluate the effect of evolution strategy on competitiveness in the banking sector in Kenya and to explore the effect of realignment strategy on competitiveness in the banking sector in Kenya.

It used descriptive survey research design since the study entailed description of facts and characteristics of a given population or sample of the population. Selected banking institutions that have been formed through a merger constituted the target population. Krejcie and morgan table for determining sample size was used to get a  sample of 64 respondents was taken from drawn from top level management, middle level management and lower level management.

The study found a mean of 95% respondents expressing that revolution strategy has the biggest effect on bank competitiveness. This was further supported by a positive correlation coefficient of 0.681. The findings clearly showed that revolution strategy has the greatest impact on bank competitiveness. The study concluded that Revolutionary strategies and Realignment strategies should be adopted by any bank that seeks to remain competitive in the industry.