King’oku, Augustine Ndemange2025-03-052025-03-052024-11https://ir-library.ku.ac.ke/handle/123456789/29702A Research Project Submitted to the School of Business, Economics and Tourism in Partial Fulfilment of the Requirements for the Award of the Degree of Master in Business Administration (Strategic Management) of Kenyatta University, November 2024. Supervisor Stephen MuatheThe competitive advantage of commercial banks in Kenya is increasingly threatened by challenges in customer satisfaction and market share due to the rise of mobile banking platforms and fintech innovations. This shift towards mobile banking has led customers to prefer digital financial solutions over traditional bank visits, making it harder for banks to meet customer expectations for seamless, accessible, and cost-effective services. As a result, banks are struggling to maintain their competitive edge. Moreover, market share for Kenyan commercial banks has stagnated or declined due to the emergence of digital competitors that offer 24/7 access to financial services. Banks with limited digital offerings are finding it difficult to compete with these mobile-based alternatives, which cater to consumer demand for convenience. The following theories informed this research; resource-based view, resource dependence, dynamic capabilities and competitive advantage theories were adopted in this study. Causal research design was adopted where all the 42 Kenyan commercial banks formed the target population. Census survey sampling design was applied and semi-structured questionnaire used. Reliability and validity results were used to improve the research instrument prior to the actual data collection. Data was analyzed using descriptive and inferential statistics. Study found that joint venture (β=0.435, p=0.000) equity alliances (β=0.227, p=0.018), and joint research and development (β=0.0.612, p=0.000) had positive significant effects on competitive advantage. With a coefficient of determination (R-square) of 68.9% and overall p-value of 0.000, the study concluded strategic alliances have a statistically significant effect on competitive advantage. The study recommended that chief bank executives establish policies to create a conducive environment for collaboration with both financial and non-financial industry players, enabling synergies such as cost reduction and operational efficiency. To the banking industry regulator CBK, the study recommends that adequate development of favorable mergers and acquisitions framework that encourage merging with strategic partners in the industry since most commercial banks had not implemented these strategic alliances, hence affecting their competitive parity. To the international monetary monitoring institutions like IMF, the study recommends their active involvement on collaborative joint research and development with local commercial banks to enhance their innovation capacities and risk identification to safeguard stakeholder interests and avoid financial crises stemming from risks characterizing commercial banks’ operations.enThesis