Determinants of Firms Repositioning in the Financial Industry: A Survey of Selected Financial Institutions
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Date
2020
Authors
Maina, Evelyne Wambui
Kinyua, Patrick Gachoki
Journal Title
Journal ISSN
Volume Title
Publisher
International Journal Corner
Abstract
Competition within the banking sector is not a new phenomenon. The mainstream banks being key players in the
financial sector have adopted different ways of repositioning themselves for instance through product and market
differentiation, cost leadership, service diversification and market focus strategies to acquire strategic positioning in the
financial industry hence growth. The general objective of this study was to establish the relationship between specific
factors and their influence on repositioning of financial institutions. The specific objectives were: to determine the
relationship between competition and repositioning of selected financial institutions; to establish the relationship
between customer satisfaction and repositioning of selected financial institutions; to determine the relationship between
business prospects and repositioning of selected financial institutions and to establish the relationship between customer
acquisition costs and repositioning of selected financial institutions. Literature was reviewed using experts and past
researchers’ literature. The study used descriptive survey research design. The target population was the 17 large
financial institutions in Kenya. The study used purposive sampling to select the respondents. In this case, all the branch
managers and one marketing manager in every financial institution participated in the study making a total of 34
participants. Descriptive statistics ware used to analyse the data. The results were presented in frequency tables and
charts. Findings of the study showed that competition was a factor considered when repositioning by
53.1%, but the firms under study did not fully succeed in repositioning as it did not put many of them ahead of their
competition as intended. Customers’ satisfaction was found to be a consideration when repositioning (9.4%).
Nevertheless, customer satisfaction was found to be low as indicated by complaints about long queues in the banking
halls, delayed loans approval, poor customer services and poor products compared to competition. It was recommended
that financial institutions should study their competition well before using a lot of money to reposition; financial
institutions should stop neglecting the customers they already have, firms should diversify when looking for business
prospects to get ahead of competition, financial institutions should consider the costs of acquiring new customers to
enable them to choose the more affordable but effective channels and the firms which have not yet considered
repositioning should do so to stay ahead of competition.
Description
A research article published in The International Journal of Business & Management
Keywords
Competition, Customer satisfaction, Repositioning, Financial institution, Business prospects
Citation
The International Journal of Business & Management. Vol 8 Iss 6