Branch Transformation Strategies and Competitive Advantage of Commercial Banks in Ongata Rongai Town Kaijado County, Kenya
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Date
2020
Authors
Kandagor, Chepkwony Daniel
Gitonga, Esther
Journal Title
Journal ISSN
Volume Title
Publisher
International Journal Corner
Abstract
Significant transformations in both developing and developed economies have happened in the banking sector over the
last twenty years. These transformation initiatives in the banking industry are meant to optimize, modernize and
reimage the bank through the application of transformation strategies to create competitive advantage for commercial
banks. The bank branch is considered as the main tool for accessing customers, increasing market share, attracting new
customers, and gaining competitive advantage. Due to the high level of competition in the banking sector in Kenya,
banks have been forced to introduce transformative strategies at the branch level. The aim of these transformative
strategies is to create loyalty, customer and stakeholder satisfaction and increase market share for competitive
advantage. Therefore, branch transformation strategy stresses the application of incremental, disruptive and
fundamental changes aimed at reimaging, optimization and modernizing of the branch network through strategic
customer centricity, strategic staffing, innovation and operational excellence in order to gain competitive advantages.
This research study aimed to determine the effect of the branch transformative strategies on the competitive advantages
of commercial banks in Ongata Rongai Town, Kenya. The specific objectives of this study included determining the
relationship between customer-centric, innovation, strategic staffing, operational excellence strategies and competitive
advantage. The study was anchored on the Resource-Based View Theory, Michael Porter’s Generic Strategies Model, and
Lean Six-Sigma Model. The study adopted the descriptive research design. The population consisted of all the seventeen
commercial banks operating in Ongata Rongai Town, Kenya. The study used census. The respondents were fifty-one top
managers working at the seventeen commercial banks in Ongata Rongai Town, Kenya. The study used primary
qualitative data. The data was collected using questionnaires. The data collected was evaluated using ANOVA. The study
established that customer-centric, innovation, and operational excellence strategies had a positive and statistically
significant effect on the competitive advantage of the seventeen commercial banks operating in Ongata Rongai Town,
Kenya. Strategic staffing was found to have a positive but statistically insignificant effect on competitive advantages. The
study recommended that commercial banks enhance the use of customer-centric, innovation, and operational excellence
strategies as this will lead to increased competitiveness. The study further recommends that commercial banks should
review their strategic staffing framework to make it more effective.
Description
A research article published in The International Journal of Business & Management
Keywords
Transformative, Customer centric, Competitive advantage, Innovative, Operational excellence, Performance
Citation
The International Journal of Business & Management. Vol 8 Iss 5