Cost Leadership and Differentiation as Competitive Strategies on Performance of Commercial Banks: The Kenyan Perspective
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Date
2025-01-30
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European Journal of Business and Management
Abstract
Poor performance in commercial banks was viewed in terms of reduction in market share, decline in profitability,
loss of customer, shrinking in asset base and liabilities which in turn lead to poor performance. Commercial
banks use cost leadership and differentiation as competitive strategies to address performance. The aim in the
study was to establish the effect of cost leadership and differentiation as competitive strategies on selected
commercial banks in Nairobi City County, Kenya. Porter’s generic strategies model and descriptive research
design were used. The target population was 1,194 respondents which included head office employees from three
selected commercial banks namely Kenya Commercial Bank, Equity bank, and Cooperative Bank of Kenya
located in Nairobi City County in Kenya. Sample size of two hundred and ninety one (291) was computed using
Krejcie and Morgan formula then selected using stratified sampling technique to ensure adequate representation.
Primary data was collected using close and open ended structured questionnaire. The data was analyzed using
descriptive statistics especially mean and standard deviation and inferential statistics specifically regression
analysis, analysis of variance and analysis of coefficients. The analyses were conducted using Statistical Package
for Social Science (SPSS) version 24. Open-ended responses were organized in themes and discussed in a
narrative form. This study adopted Cronbach’s alpha method to compute reliability and a coefficient of 0.957
was obtained which was more than a threshold of 0.80 hence the research instrument was reliable. Results were
presented using tables. The study findings indicated that cost leadership, differentiation, and growth strategies
had effect. The study results are valuable to management of commercial banks, policy makers, other
organisations, academicians and researchers
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Citation
Ochieng, V. O. and Kipkorir, C.S. S. (2025), Cost Leadership and Differentiation as Competitive Strategies on Performance of Commercial Banks: The Kenyan Perspective; European Journal of Business and Management