Abstract:
This study sought to determine the influence of information and communication technology on choice of competitive strategies in commercial banks in Kenya. The target population was the 43 licenced commercial banks by Central bank of Kenya of which 77% responded. Census study method was used to collect the data required for the study. Questionaires were administered to the Operations managers in the banks. Data from the questionaires was analysed and frequency tables, means and percentages were used to present the information. Asimple trend analysis was done to ascertain how competetive strategies have been changing with advent of ICT innovations. Findings indicated that majority of the banks had embraced product differentiation and cost leadership strategies together and not in exclusion. ICT innovations were highly integrated in the competitive strategies in the banking sector. The study found that networked branches had positive influence on choice of competitive strategies in the banks. They had led to more product differentiation in the banking industry. Networked branches had not led to lower pricing but better service delivery by taking the services near to the customers and enhancing brand visibility. The study also found that electronic banking had influenced choice of competitive strategies by leading to product differentiation and cost leadership strategies. The study also found that before the advent of ICT innovations, the banks were competing on bases of market share since the banking industry was not facing stiff competition as at the moment. The agency and banking was being applied by only eight banks and these were amongst the main players in the industry controlling large customer base which necessitated application of agency banking as part of alternate business service delivery channels. The findings also indicate that with the current trend of ICT innovations, the banking industry will have higher efficiency in operations, more customer relationship management focus, lesser and smaller branches and finally more online banking and strategic partnerships in globalization of financial service delivery. The study recommends a study be done on how ICT has influenced strategic partnerships in the financial partnerships leading to relational rents. It also recommends policy be put in place to ensure product testing before product launch to protect consumers.
