Thesis:

An Assessment Of Strategic Competitive Practices On Performance Of Financial Institutions In Kenya Case Of Equity Bank Meru County

The global financial industry has been characterized by intense competition, prompting financial institutions to adopt strategic competitive practices to enhance their performance. This research examined the Kenyan financial sector, focusing specifically on Equity Bank in Meru County, to evaluate the impact of strategic competitive practices on its performance. The study concentrated on three main strategic competitive practices, Cost Leadership, Differentiation, and Focus, and explored how these strategies influenced the competitive environment in the Kenyan financial market. The research aimed to provide insights for policymakers, financial institutions, and researchers, recognizing that strategic competitive practices are crucial for economic development, financial inclusion, and overall performance. The Cost Leadership strategy was assessed for its ability to provide a competitive edge by emphasizing efficient operations, economies of scale, and standardized products. The Differentiation strategy was evaluated for its impact on customer satisfaction and market positioning through unique offerings and premium prices. The Focus strategy was analyzed for its role in catering to specific market niches through market segmentation and customization. The study was guided by the Resource-Based View, Porter's Five Forces Model, and Transaction Cost Theory, employing a descriptive research design. It targeted 100 individuals, including top-level, middle-level management and operations staff at Equity Bank in Meru County, using a census technique. Primary data was collected via self-administered questionnaires, and data analysis involved descriptive and inferential statistical methods. To ensure the study's accuracy, a pilot study was conducted in Embu County to refine data collection tools. The study found that all strategic variables surpassed the acceptable reliability threshold of 0.7, indicating high internal consistency for each strategy measured. Specifically, the Cost Leadership strategy recorded a Cronbach’s alpha of 0.8500, the Differentiation strategy scored 0.7921, and the Focus (Niche) strategy reached 0.7209, leading to an overall average alpha coefficient of 0.7877. These values demonstrate that the questionnaire possesses satisfactory reliability in evaluating the strategic competitive practices applied. In addition, p-values were used to determine the statistical significance of the relationships between these strategies and organizational performance outcomes. Both the Cost Leadership and Differentiation strategies showed p-values below the 0.05 threshold, which confirmed that the positive effects of these strategies on performance were statistically significant. The research underscored the importance of establishing regulatory frameworks to facilitate strategic competitive practices within the financial sector. It also highlighted the role of customer education in increasing service awareness and satisfaction levels, thereby enhancing overall customer engagement. Furthermore, the study advocated for stronger collaboration among stakeholders to harness collective expertise and resources effectively. This collaboration could amplify the sector’s resilience and support sustainable competitive advantages. The study recommended further research to evaluate the impact of these strategies across a broader range of financial institutions and to assess the sustainability of their effects over time. Such research could provide valuable insights for policymakers, financial institutions, and stakeholders aiming to drive economic development and improve customer experiences in Kenya's financial sector.