Value Disciplines and Competitive Advantage of Commercial Banks in Kenya
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Date
2023
Authors
Odhiambo, Hezron Juma
Journal Title
Journal ISSN
Volume Title
Publisher
Kenyatta University
Abstract
Due to increased competition, the Kenyan banking system has had erratic
performance in recent years. As a result, the major question is whether Kenyan
commercial banks can use value disciplines to help them maintain their
competitiveness. The study aimed to investigate the function of value discipline in
competitive advantage: a taxonomy of Kenyan commercial banks. The specific
objectives were to: determine the effect operational excellence on competitiveness of
Kenyan commercial banks/lenders; assess the relationship between customer intimacy
and competitiveness of Kenyan commercial banks/lenders and: investigate the effect
product leadership on competitiveness of Kenyan commercial banks/lenders.
Theoretically, the porters’ five forces theory, competitive advantage theory, theory of
planned behaviour and dynamic capability theory grounded the study. The research
used a descriptive research design. The study comprised of businesses rendering
commercial banking services in Kenya. A non-probability method of sampling was
utilized. Structured questionnaires were used as applicable. The study targeted all the
42 Kenyan commercial banks/lenders. The 42 commercial bank managers were
targeted as the unit of observation and the 42 commercial banks as the unit of
analysis. Since the population in the current study was small but adequate for study
research, that is, 42, the study used a census survey (thus no sampling was done) and
thus the targeted population were still the commercial banks. Pilot research was
conducted to establish reliability and validity. This included four participants,
reflecting 10 percent of the sample population (0.1*42). Questionnaires were the
instruments of data collection. The replies were transcribed and qualitative
methodology was employed. The SPSS application was used to help with this
analysis (v.25.0). Descriptive analytics gathered summary data such as averages, and
frequencies, whereas inferential metrics aided in determining the causative link
between parameters. The study used the R2s, F values, and beta coefficients at 0.05
significance thresholds. Charts, graphs, tables, diagrams, and illustrations were used
to present the findings. The findings indicated that operational excellence has a
directional/positive and statistically significant connection with competitive
advantage of Kenyan commercial banks/lenders (β=0.342, p=0.000). It was also
confirmed that customer intimacy has a directional/positive and statistically
significant connection with competitive advantage of Kenyan commercial
banks/lenders (β=0.247, p=0.000). Likewise, product leadership has a
directional/positive and statistically significant connection with competitive
advantage of Kenyan commercial banks/lenders (β=0.359, p=0.000). It has been
recommended that having a high level of consumer awareness might lead to increased
client satisfaction, which leads to increased buy back desire. The also recommends
continuous and persistent innovation of products to help in the advancement and
maintaining a competitive edge in the industry. Having superior products imply that
the banks are able to maintain and attract a specific group of customers whom to the
banks, ensure consistent sales and returns. The study also suggests to the operations
management to continuously improve the financial institution delivery of services,
consumer experience, purchase price and effectiveness, a considerable increase in
income and profitability, and gives banks competitiveness. Sustainable distribution
chain effectiveness is affected by learning and innovation efficiency, and supply chain
intellectual capital plays an essential moderating function.
Description
A Research Project Submitted to the School of Business, Economic and Tourism in Partial Fulfillment of the Requirement for the Award of the Degree of Master of Business Administration (Strategic Management Option) of Kenyatta University
Keywords
Value disciplines, Competitive Advantage, Commercial Banks, Kenya