Market Coverage on Competitive Advantage of Commercial Banks in Nakuru County

Abstract

According to the statistics, Kenya's banking industry has witnessed considerable and
dynamic changes in recent years, with increased severe competition putting pressure on the
industry's attractiveness as well as profitability and market share. Therefore, this study
sought to assess market coverage on competitive advantage of commercial banks in Nakuru
County. The study was anchored on the concept of market power theory and Competitive
Advantage Theory. The unit of analysis was 28 commercial banks operating in Nakuru town,
and registered by the Central bank of Kenya (CBK). The target population was 112
comprising of the branch managers, marketing managers, operations managers, and one
officer in charge of the IT department. The study purposively sampled all the four targeted
respondents. The study used both primary and secondary data. Primary data was collected
using semi-structured questionnaires. Secondary data was collected using data collection
sheets. To test the reliability of the research instruments, the questionnaire was randomly
administered to 8 respondents from commercial banks in Kiambu County to verify the
effectiveness of the research instruments. Descriptive analysis was done using frequency,
percentage, means and standard deviations to describe the basic characteristics of the
population. Inferential statistics involved the use of Pearson’s Product Moment correlation
and bivariate regression. Product Moment correlation was used to determine the nature of
the relationship between the variables while bivariate regression was used for individual
research hypothesis. Data was presented in form of frequency tables. The study concluded
that there was a positive and statistically significant correlation between market coverage
and competitive advantage of commercial banks in Nakuru County. In addition, the
researcher recommended that commercial banks should adopt digital banking to expand
their market coverage, this will help the banks to focus on the most common needs of the
customers.
Keywords: Commercial Banks, Competitive Advantage and Market Coverage