Strategic alliances and competitive advantage of commercial banks in Kenya.

Commercial banks in Kenya operate in quite dynamic financial market environment and continue to experience stiff competition in the provision of financial services. The liberation of the financial markets has resulted into an upsurge in the number of institutions providing financial products and services, threatening the future of Kenyan commercial banks. This study aimed at determining the effect of strategic alliances on competitive advantage of commercial banks in Kenya. The objectives were to determine effect of joint ventures, equity alliances, and joint research and development on the competitiveness of Kenyan banks where Resource Based View, competitive advantage, and resource dependence theories were used. Causal research design was adopted where all the 42 Kenyan commercial banks formed the target population. Census survey sampling design was applied and semi-structured questionnaire used. Using descriptive and inferential statistics analysis, the study found that joint venture (β=0.435, p=0.000) equity alliances (β=0.227, p=0.018), and joint research and development (β=0.0.612, p=0.000) had positive significant effects on competitive advantage. With a coefficient of determination (R-square) of 68.9% and overall p-value of 0.000, the study concluded strategic alliances have a statistical significant effect on competitive advantage. The study recommends that managements of commercial banks should fast-truck implementation of such alliances to for improved competitiveness. [ABSTRACT FROM AUTHOR]