Competitive strategies and organizational performance of commercial banks in Machakos County, Kenya

Abstract

To ensure of their survival in this dynamic environment characterised by constant change in customer taste and preference, organizations are focusing on their choice and implementation of strategies. This study therefore sought to establish the relationship between competitive strategies and organizational performance of commercial banks in Machakos County. The study specifically sought to determine the influence of cost leadership strategy, differentiation strategy, market focus strategy and product innovation strategy on performance of commercial banks. The study adopted a descriptive research design. The target population was 175 management employees at the commercial banks in Machakos County. Yamane formula was used in selecting the study sample size. The study sample size was 122 respondents. The study used stratified sampling procedure to select the study sample size. Primary data collected using questionnaires were used in the study. Analysis was done using SPSS version 23. The study collected quantitative information which was analysed using descriptive statistics such as mean, standard deviation, frequencies and percentages and presented in tables and figures. The study also established the strength and direction of relationship between variables computing correlation analysis. To determine the relationship between competitive strategies and organizational performance of commercial banks, the study computed multiple linear regression. The study found that cost leadership strategy positively and significantly influence organizational performance of commercial bank; differentiation strategy positively and significantly influence organizational performance of commercial banks; market focus strategy positively and significantly influence organizational performance of commercial banks; and product innovation strategy positively and significantly influence organizational performance of commercial banks. The study therefore recommends originations to embrace cost reduction strategies which include tight cost and overhead control, advertisement, research and development; this will enable the company to produce cheap products. Organizations should train its employees, embrace modern technology, provide innovative products and services and rebrand existing ones; this can help the organization achieve differentiation. There is need to select large segments that has potential for growth where other competitor are not interested .