International Research Journal of Business and Strategic Management
EFFECT OF RESPONSE STRATEGIES ON COMPETITIVENESS OF PUBLIC LISTED COMMERCIAL BANKS, KENYA
Abstract
The twenty-first century challenges and trends in commercial banks requires banks to respond appropriately in order to enhance and sustain their competitiveness. Banks face stiff competition from rival banks, non-financial institutions and technology firms entering the financial services sector. This study sought to establish the effect of response strategies on the competitiveness of public listed commercial banks, Kenya. This study was designed to meet the ensuing specific targets: examine the influence of technology adoption on the competitiveness of public listed commercial banks and assess the influence of cost reduction strategies on competitiveness of public listed commercial banks, Kenya. The study was grounded in the following underlying principles: Innovation Diffusion Theory and Transaction Cost Theory. The research used a descriptive cross-sectional research design. The population of interest was 31,144 employees in 10 public listed commercial banks, Kenya. A total of 210 respondents was used as sample size. The sample size was arrived at by use of purposive and simple random sampling techniques. Primary data was used in the study. Questionnaires were used to collect the primary data. The validity and reliability of the questionnaire was tested by carrying out a pilot study. Cronbach's alpha was employed to assess the internal consistency of every variable utilized within the research. A Cronbach alpha score higher than 0.7 was achieved for reliability, while a factor loading surpassing 0.7 was obtained for validity. Qualitative data that was gathered was analyzed through the application of descriptive and inferential statistics using SPSS version 29. Regression and correlation analysis were done too. The study revealed that response strategies significantly influence the competitiveness of public listed commercial banks in Kenya. Technology adoption and cost reduction strategies had positive influence on competitiveness. The study recommended that public listed commercial banks should implement the appropriate response strategies to improve their competitiveness.
Keywords: Response Strategies, Competitiveness, Technology Adoption, Cost Reduction Strategies
Full Text:
PDFReferences
Adebayo, F. A., & Du Toit, E. (2019). Geographic diversification and financial performance of South African banks. Development Southern Africa, 36(2), 227-245.
Adenikinju, A., Adegbaju, A. A., & Bello, I. (2018). Risk Management and Competitiveness of Commercial Banks in Nigeria. CBN Journal of Applied Statistics, 9(2), 79-105.
Alnoor, A., Khaw, K. W., Chew, X., Abbas, S., & Khattak, Z. Z. (2023). The influence of the barriers of hybrid strategy on strategic competitive priorities: evidence from oil companies. Global journal of flexible systems management, 24(2), 179-198.
Amini, M., & Rahmani, A. (2023). How strategic agility affects the competitive capabilities of private banks. International Journal of Basic and Applied Sciences, 10, 8397-8406.
Angwenyi, J. (2017). The impact of branch network expansion on market share growth of commercial banks in Kenya. International Academic Journal of Human Resource and Business Administration, 2(3), 110-124.
Buul, O. B., & Omundi, R. (2017). An analysis of competitive strategies and performance of small and medium enterprises in Kenya: A case of Nairobi central business district. Journal of Business and Strategic Management, 2(2), 72-94.
Chang, H., & Chen, L. (2022). Customer Satisfaction, Retention, and Competitiveness in Banking. International Journal of Bank Marketing, 40(1), 45-62.
Chen, K., & Pan, Y. (2020). Sustainability of China’s listed commercial banks under background of the ‘new normal’. Asia-Pacific Journal of Accounting & Economics, 27(6), 685-702.
Gituma, I. M., Kimencu, L., & Muchemi, A. (2018). Marketing Outsourcing and Performance of Commercial Banks in Kenya. International Journal of Academic Research in Business and Social Sciences, 8(12).
Hassan, M. K., & Ali, S. (2023). Cost management strategies and competitive performance of commercial banks. Review of Financial Studies, 36(2), 454-477.
Janjane, H. A., & Fredrick, K. (2023). Influence of Strategic Leadership on Competitive Advantage of Commercial Banks in Kenya, A Case Study of National Bank of Kenya. International Research Journal of Business and Strategic Management, 5(2).
Johnson, R., & Smith, T. (2022). The Impact of Employee Satisfaction on Bank Competitiveness. Human Resource Management Journal, 30(3), 257-275.
Karanja, B. K. & Were, S. (2017). Effect of corporate strategy on performance of retirement benefits fund: A case of Liberty Life Assurance (K) Ltd. International Academic Journal of Human Resource and Business Administration, 2(3), 116-149.
Kori, B. W., Muathe, S., & Maina, S. M. (2020). Financial and non-financial measures in evaluating Performance: the role of strategic intelligence in the context of commercial banks in Kenya. International Business Research, 13(10), 130-130.
Koriyow, O. I. & Karugu, L. (2018). Competitive intelligence strategies and performance of commercial banks in Garissa County, Kenya. International Academic Journal of Human Resource and Business Administration, 3(1), 371-394.
Kungu, G., Desta, I., & Ngui, T. (2019). An assessment of the effectiveness of competitive strategies by commercial banks: A Case of Equity Bank. International Journal of Education and Research, 2(12), 333-346.
Lei, H., Tao, T. H., & Chen, X. J. (2018). Studies on the evaluation of sustainable competitiveness of listed commercial banks in China. International Conference on Management, Economics, Education, Arts, and Humanities (MEEAH 2018) (pp. 61-65). Atlantis Press.
Mang’ana, R. (2022). Strategic adoption of technological innovations on competitive advantage of commercial banks in Kenya. Journal of Business and Strategic Management, 7(2), 16-36.
Marangu, M. W. N., Mwiti, E., & Thoronjo, E. (2017). Analysis of Cost Leadership Strategy Influence on Organizations’ Competitiveness of Sugar Firms in Kenya. European Journal of Business and Management, 9(28), 38-40.
Marete, A. (2018). M. & Kihara, A. (2018). Effect of Competitive Strategies on Performance of Commercial Banks in Kenya. International Journal of Strategic Management, 7(5), 97-114.
Mbai, E., Ngui, T., & Ndiao, O. (2018). Competitive strategies implementation and quality service delivery in Standard Chartered Bank (K) Ltd. International Academic Journal of Human Resource and Business Administration, 3(1), 246-265.
Mita, G. O., Ochie’ng, I., & Mwebi, R. (2017). Influence of generic strategies on performance of metal works SME businesses in Naivasha town. International Academic Journal of Human Resource and Business Administration, 2(3), 477-500.
Mukira, A. R., Kariuki, P., & Muturi, W. (2022). Cost Reduction Strategies and Performance of Commercial Banks in Kenya. Journal of Strategic Management, 7(1), 52-63.
Mwangi, J. K., & Omwenga, J. Q. (2022). Strategic Management Capabilities and Performance of Commercial Banks in Kenya. International Journal of Social Science and Humanities Research, 10(4), 48-69.
Ndungu, J. G., & Muturi, W. (2019). Effect of diversification on financial performance of commercial banks in Kenya. International journal of current aspects, 3(5), 267-285.
Nduta, R. W., & Wanjira, J. (2019). E-banking strategy and performance of commercial banks in Kenya. International Journal of Current Aspects, 3(5), 147-165.
Nguyen, T. P., & Vo, X. V. (2022). Operational efficiency and competitive advantage in the banking sector: Evidence from listed banks. International Review of Economics & Finance, 80, 87-101.
Njenga, J. M., & Odollo, L. (2023). Strategic leadership practices and performance of listed commercial banks in Kenya. International Academic Journal of Economics and Finance, 3(9), 309-359.
Nzioka, C., & Kariuki, P. (2021). Influence of Strategic Internal Factors on Competitive Advantage of Commercial Banks in Nairobi County, Kenya. Journal of International Business and Management, 4(7), 01-16.
Obola, J. O., Kwendo, E., & Otuya, W. (2021). Influence of Competitive Strategies on Customer Loyalty: A Case of Kenya Commercial Bank South Sudan. International Journal of Multidisciplinary and Current research, 9.
Odollo, L., Iravo, M. A., & Sakwa, M. (2018). Effect of Competitive Priorities on the Operations Performance of Sugar Manufacturing Firms in Kenya. The International Journal of Business & Management, 6(3).
Ogwuma, S. N. (2019). Customer-Centric Strategies as a Competitive Tool in the Nigerian Banking Industry. International Journal of Academic Research in Business and Social Sciences, 9(6), 514-525.
Pinar, M., Trapp, P., Girard, T., & Boyt, T. E. (2021). The effects of rebranding on financial performance: An empirical analysis of publicly listed banks. International Journal of Bank Marketing, 39(4), 581-600.
Sasitharan, D., & Lazim, H. M. (2018). Competitive Strategies and Technological Capabilities among Malaysian Manufacturing Organisation: Empirical Evidence from Malaysia. International Journal of Innovative Research and Development2018, 204-208.