Effect of Strategic Factors on the Competitiveness of Commercial Banks in Kenya

Abstract

This study sought to determine the effect of strategic factors on the competitiveness of commercial banks in Kenya. The research sought to achieve various specific objectives: to investigate the effect of strategic customer focus on the competitiveness of commercial banks in Kenya; to evaluate the effect of strategic innovation on their competitiveness; establish the effect of strategic continuous improvement on their competitiveness and determine the effect of strategic information communication technology on their competitiveness. The research adopted a descriptive research design. Additionally, the study's target population was drawn from 39 commercial banks in Kenya with a representation of various employees from different levels of the organization. The study's sampling frame was drawn from all licensed banks in Kenya and the study adopted the random stratified sampling technique. On data collection, a questionnaire was used to collect the primary data whereas another form of data was drawn from annual reports of the CBK and commercial banks. The collected data was analyzed using SPSS software. Regression and correlation analysis were used to determine the nature and the strength of the relationship between the independent and dependent variables. The results showed that the relationship between Strategic Customer Focus   and firm competitiveness had a coefficient (β1) of 0.281 (p-value=0.021). This meant that a unit increase in Strategic Customer Focus   would lead to a 0.281 increase in firm competitiveness in the commercial banks in Kenya. In addition, the association between Strategic Innovation and firm competitiveness had a regression coefficient of 0.121 (p-value=0.002). This translates that a unit increase in Strategic Innovation would lead to an increase of 0.121 in firm competitiveness. More so, the association between Strategic Continuous Improvement and firm competitiveness had a coefficient of 0.025 and the p-value = 0.031. This meant that a unit increase in Strategic Continuous Improvement would lead to an increase of 0.025 in firm competitiveness. Finally, the regression coefficient between Strategic Information Communication Technology was 0.189 (p value = 0.041). This showed that a unit increase in    Strategic Information Communication Technology would lead to an increase of    0.189 in firm competitiveness. The study recommends that: Commercial banks should consider interacting with their customers more often because the more they interact with their customers, the more the opportunity to build a relationship and create further value with particular customers. Commercial banks should adopt competencies to build the market deviations and respond quickly, hence capitalizing on emerging opportunities. Commercial banks should see continuous improvement in terms of the role it plays in quality improvement, customer satisfaction, employee engagement and overall productivity. Commercial banks should embrace different electronic distribution channels to meet the demands of customers.