Value Disciplines and Competitive Advantage of Commercial Banks in Kenya

Abstract

Purpose: The building of sustained competitive advantage is seen as a vital characteristic in ensuring competitiveness. To effectively operate in such a dynamic and competitive market, a corporation must implement a competitive strategy that optimizes the value of stakeholders. However, 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 discipline to help them maintain their competitiveness. That is, how can value discipline translates into a competitive advantage among Kenyan commercial banks? The study aims to investigate the function of value discipline in competitive advantage: a taxonomy of Kenyan commercial banks.

Methodology: This was aided by a descriptive cross-sectional analysis methodology. The study comprised 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 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. 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.

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).

Unique contribution to theory, policy and practice: 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. Thus, recommendations are emphasized on the need for banking institutions to improve awareness and participation of customers in their operations to improve loyalty and satisfaction. 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