Thesis:

Assessment of porters’ competitive strategies on Performance of commercial banks in Marsabit county Kenya

The volatility nature of the business environment mandates the use of competitive strategies in order to compete. This necessitates the adoption of competitive strategies by financial institutions in order to remain profitable. There are limited studies on the influence of competitive strategies on performance of commercial banks in Kenya. This, as well as other growing banking challenges, has an operational and management impact on the bank's performance. However, there has been limited study on the assessment of commercial banks' competitive strategy on their performance especially in arid and semi arid areas and, adopting a complete strategic plan remains a pipe dream as long as the driver's strategies at the business level remain unknown to management. The purpose of the research will be to assess the influence of porters’ competitive strategies on the performance of commercial banks in Marsabit County. The study will be guided by the following specific objectives: to assess the effect of differentiation strategy on the performance of banks in Marsabit County; to establish the effect of cost leadership strategy on banks' performance in Marsabit County; to determine the effect of diversification strategy on the performance of commercial banks in Marsabit County; and to assess the effect of positioning strategy on the performance of commercial banks in Marsabit County. The following three theories will be used to elucidate the link between competitive strategies and performance: Resource-based theory, Porters' generic model, and Porter’s five forces model. The study will deploy a cross-sectional study design. The study will be conducted in Marsabit County Town, Kenya. The target population will be the banking staff of commercial banks in Lodwar, Town. The study will employ a census method targeting all the 105 bank employees comprising (102) operational staff and (3) managers from the four 3 banks for questionnaires and interview schedules respectively. The researcher will collect primary data. The data will be collected by use of questionnaires and interview schedules. The findings reveal that differentiation, cost leadership, diversification, and positioning strategies significantly influence bank performance. Differentiation through technological innovations, such as mobile banking, enhances customer satisfaction and loyalty. Cost leadership remains crucial, but banks must balance cost-cutting with quality service to retain clients. Diversification strategies enable banks to cater to a broader clientele, while effective positioning fosters strong brand identities and community engagement. The study concludes that a combination of these strategies equips banks to navigate a competitive landscape successfully. Recommendations include investing in technology, balancing cost management with service quality, strategically diversifying product offerings, and continuously evaluating positioning strategies. Further research is suggested to explore the long-term effectiveness of these strategies and their implications across different regions. This research contributes to the understanding of competitive dynamics in the banking sector, providing valuable insights for practitioners aiming to enhance their strategic approaches and improve overall performance.