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The Role of Strategy in a Competitive Business Environment: A Case Study of Ecobank Ghana Limited

Published Article
European Journal of Management and Business Economics
  • Business
  • Strategy
  • Environment
  • Competive


The financial systems in Ghana tend to evolve around the banking system. The banking sector is experiencing increased competitions in the new deregulated market. Competition in the banking sector matters for a number of reasons. Operating in the competitive banking environment is very challenging. Formulating a consistent strategy is an intricacy for many management teams, making that strategy work is even more complex. The aim of this study is to examine the role of strategy in competitive business environment. A case study research design was adopted for easy assessment of the role of strategy in a competitive environment. Ecobank Ghana Limited, the Pan African bank was adopted for the case study area. Both primary and secondary source data was used with a sample size of 320 respondents. Convenient sampling technique was used to collect data from Management of Ecobank. The study therefore found that the competitive strategies of Ecobank Ghana are effective and that the strategies have contributed to high financial performance of the bank. The impact of competitive strategies on the performance of the bank are increasing sales volume; profit efficiency, increase productivity, increase in ROE, businesses and sustainable growth increased market share, enhanced customer service and increased of customer waiver of charges. The study recommends that the bank should work hard to build and sustain its competitive advantage and be prepared for the next wave of market reforms and restructuring by applying new methods of information technology and upgrading the skills of staff and management. INTRODUCTION The financial systems in Ghana tend to evolve around the banking system. As the main financial intermediary, financial institutions such as banks ensure mobilization of savings from diverse sources and allocate the savings to more productive activities, benefiting not only investors and beneficiaries of the investments but the economy at large (Gulde 2006). An efficient banking system enables lower transaction cost and help bring together both the suppliers and borrowers of funds to transact business at minimal or no cost. Indeed, a banking system which efficiently channels financial resources to productive use is a powerful mechanism for economic growth (Levine, 1997). In order to ensure the continuous improvements, efficiency performance, and higher productivity of the banks and the banking sector, there is the need for financial sector reforms within the banking industry to regulate both banking. In line with this for instance, Bank of Ghana implemented several policies/measures over the last decades. Notable examples include: The financial liberalization and institutional reforms initiated by the International Monetary Fund (IMF) (Mathieson & Roldo, 2001) and World Bank (Demirguc-Kunt 2004) which resulted into the implementation of the Economic Recovery Programme (ERP) in April 1983, with the aim of liberalizing the economy from controls in order to enhance productivity in the economy. The Financial Sector Adjustment Programme (FINSAP) in 1988, which was aimed at addressing the weaknesses in the banking industry, restructuring the public sector banks in 1989, the Universalism of the banking sector, the Increase in banking minimum paid-up capital, and the opening up the banking sector to foreign banks. These measures and policies implemented were aimed at liberalizing the banking sector to allow for competitions within the sector. The banking sector is experiencing increased competitions in the new deregulated market. Competition in the banking sector matters for a number of reasons. As in other industries, the degree of competition in the banking sector matters for the efficiency of production of financial services, the quality of financial products and the degree of innovation in the sector. In this regard banks have to recognise their competitive strategy in order to have a competitive edge and secure their position in the market (Naoum 2001). Therefore, strategy needs to play an important role in order for the banks to gain competitive advantage in the market. It is against this background that this study is being conducted on the role of strategy in a competitive business environment using Ecobank Ghana Limited as a case study. Problem Statement Since Ghana embarked on its financial sector reforms of liberalizing its domestic banking sector, the intent has

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