Loading...
Please wait, while we are loading the content...
Similar Documents
Mobile banking as a strategic response by Equity Bank Kenya Limited to the challenges in the external environment
| Content Provider | Semantic Scholar |
|---|---|
| Author | Mutua, Gillian M. |
| Copyright Year | 2009 |
| Abstract | The study focused on how Equity Bank Limited utilizes mobile banking as a strategic response to the changes in the external environment. Equity Bank is one of the leading commercial banks that started operating after being legally registered in 1984; the bank has progressed from a building society to a Microfmance Institution. It boosts o f a large client base and has won many awards in the past few years for its excellent performance in the banking industry. The banks focuses on embracing the latest technology in carrying out their operations efficiently and effectively and also creating products using this up to date technology that are far much superior than those of its competitors. The research intended to bridge a gap in Knowledge, by determining the corporate strategy of mobile banking that Equity Bank will adopt to respond to the challenges in the external environment making it a more successful enterprise than at present in its respective industry. The study will be beneficial to various stakeholders; first, the management at Equity Bank, secondly entrepreneurs willing to venture in the mobile banking industry and thirdly scholars wishing to carry out further research in the industry could find it useful in guiding o f the strategies to adapt to the constant changing business environment. The concept o f strategic management is thoroughly defined and explained in the literature review of this study. The research also tries to show the formulae o f how a business can formulate strategies and strategic responses in order to meet the needs o f the constant changing business environment so that the firm can have a competitive edge over its competitors. Additionally it shows business environment and how the various aspects in the environment interact and relate to one another. The research design used in this research was that of a case study. The method of primary data collection that was used is that of an interview guide administered through personal interviews. Due to the interpretive nature of this research, the case study was qualitative in nature since the data collected is qualitative. Content analysis was used in analyzing 4he indepth qualitative data collected. For a nrm to have a competitive advantage over its competitors it’s should coin a strategic response that will adapt to the constant changing environment. The Tndings this study tocused on the mobile banking responses and marketing responses on the external environment and show how they were used to solve the challenges found in the business environment based on the forces found in the external environment namely; political, economic, egal and regulatory, social and demographic and information technology. In conclusion that can be determined that the mobile banking industry is a placed in a very dynamic environment due to the stiff competition from rival companies and the constantly changing Information Technology aspects context and contents therein. The marketing strategies to be used to maximize revenue for the firm should be in tune with the constant changing external environment. The firm should strive to have a niche in the market in offering a service that is unique from its rivals to be the market leader in the industry. CHAPTER ONE: INTRODUCTION 1.1 Background of the Study In order for firms to have a competitive edge over their competitors they have to constantly redesign their strategies. This is due to the competitive environment surrounding their respective industries. Failure in management to steer the organization to effectively adjust to its environment according to Ansoff and McDonnell (1990), results to a strategic problem. Such a problem will be apparent by a mismatch between what the organization can offer and what the market demands. Since all business organizations-are open systems they influence and are influenced by external conditions which are largely out of their control (Pearce and Robinson, 1997). Thus a firm to successfully position itself in its industrial environment the strategic managers should look beyond its operations. They are obliged to constantly monitor the actions of the relevant stakeholders like competitors, customers, suppliers, creditors, government labour and also try to deduce their next course of action. Strickland (1998) states that managers have the ever-present responsibility for detecting when new developments require strategic response and when they do not. They should continuously monitor progress, spot problems early and track the winds of market and customer change and initiative adjustments. Johnson and Scholes (2002) state that the business environment summarizes many influences and the difficulty is making the sense of diversity. He goes on to further say that the pace of technological change and the speed o f global communication are of paramount importance currently than ever before. A firm uses resources as inputs which it converts to outputs, and then exports the outputs to the environment. Daft (1986) goes to stipulate that open svstems-can be enormously complex in that internal efficiency is just one issue and is sometimes a minor issue. The firm must research and obtain the required resources, deduce and act in regard to the environment changes, dispose o f the outputs, control ad coordinate internal activities I the face of environmental disturbances and uncertainty if the its to achieve its strategically set objectives or efficiency. 1.1.1 Strategic Response According to Pearce and Robinson (1997) strategic response is a set of decisions and actions that results in the creation and implementation of plans intended to achieve an organization’s objectives. When the firm’s respective business environment changes it should revise their strategies to match the turbulence level (Ansoff and McDonnel, 1990).Failure to adapt the organization to its environment leads to a strategic problem thus failure of the firm in meeting its objectives. The organizations external environment consists of all the conditions and forces that affect its strategic options ad define its competitive situation (Pearce and Robinson, 1997). Thompson (1997) defines strategic adaptation as gradual changes overtime to the strategies and goals of an organization. These changes as said earlier can be either gradual or evolutionary. Responses to such may take varied forms depending on the organizations capability and its surrounding industry environment. Mature and targeted strategic responses are formidable weapons for a firm in attaining and sustaining a competitive edge over its rivals. Luftman (1996) argues that the way a firm views its businesses, customers and competition is vital to effectively aligning its business and Information Technology (IT) strategy. IT is used to automate processes and to augment the skills of the organization’s staff. Rayport and Sviokla (1995).stipulate that competition is defined along two scopes: The physical world of resources and the virtual world of information. Information supports and improves each activity in a firm making it a source of added value and hence, competitive advantage, provided firms are able to draw that value. Gilbert (1995) notes that strategically successful firms obtain market feedback quickly and constantly and adapt the feedback ahead of their rivals in their respective industry. They exploit the potential o f strategic as well as competitive and operating information systems. Specific information technology variables can influence a firm’s response to competition include the usage of real-time systems, extent of interconnectivity of distribution channels and the effectiveness o f telecommunication systems. To effectively restructure a firm one can carry out business process reengineering. According to Hammer (1996), "Companies can dramatically improve their efficiency and quality by focusing on customers and the processes that create value for them”. Wilson and Rosenfeld (1990) show organization structure as a well formulated pattern of relationships between component parts of a firm outlining communication control and authority patterns. Thus structure differentiates the parts of the organization and explains the relationships between them. 1.1.2 Mobile Banking The integration o f information communication technology (ICT) into various business functions is slowly gaining momentum. Due to the premise of the o f a rapidly growing landscape the traditional banking practices are being taken to new frontiers due to the emergence of ICT. We are moving from the banking halls to the use of bandwidth. The mobile phone based system of money transfer has many capabilities that include the ultimate capacity to resolve complex money storage transmission and transactional issues. However, no matter what business model, if mobile banking is being used to attract low-income populations in often rural locations, the business model will depend on banking agents i.e., retail or postal outlets that process financial transactions on behalf telcos or banks. The banking agent is an important part of the mobile banking business model since customer care, service quality, and cash management will depend on them. Many telcos will work through their local airtime resellers. However, banks in Colombia. Brazil. Peru, and other markets use pharmacies, bakeries, and so on. These models differ primarily on the question that who will establish the relationship (account opening, deposit taking, lending and the like.) to the end customer, the Bank or the NonBank/Telecommunication Company (Telco). Another difference lies in the nature of agency agreement between bank and the Non-Bank. Models of branchless banking can be classified into three broad categories Bank Based and Nonbank Based. 4 Services provided through both the Mobile (SMS) and Internet banking include a) checking account details; b) retrieving account balance and statement; c) check transactions ordering check books |
| File Format | PDF HTM / HTML |
| Alternate Webpage(s) | http://erepository.uonbi.ac.ke/bitstream/handle/11295/12269/Mutua%20%20%20-%20Mobile%20Banking%20As%20A%20Strategic%20Response%20By%20Equity%20Bank%20Kenya%20Limited%20To%20The%20Challenges%20In%20The%20External%20Environment.pdf?isAllowed=y&sequence=3 |
| Language | English |
| Access Restriction | Open |
| Content Type | Text |
| Resource Type | Article |
