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Title: An Assessment of the Effectiveness of Competitive Strategies of Private Commercial Banks in Ethiopia: The Case of Dashen Bank and Awash International Bank
???metadata.dc.contributor.*???: Zewdie Shibrie(Dr.)
Tilahun, Kifle
Keywords: Generic Strategies and Performance;Private Commercial Banks
Issue Date: Nov-2016
Publisher: A.A.U
Abstract: The banking industry has been facing strong challenges due to competition. After the establishment of private banks in the country, the industry has been characterized by adoption of modern technology and huge branch expansion. What is more is that the sector is highly regulated by the government through the central bank known as “National Bank of Ethiopia”. The banks are therefore under pressure to sustain their competitive position. This situation has, therefore, entailed the banks to design their competitive strategies in a manner to enable them become superior performers in their industry. The purpose of this study was to assess the effectiveness of the generic competitive strategies adopted by Awash International Bank and Dashen Bank. The research also tries to describe the effect of generic strategies adopted by the banks under study on their performance. A case study design was used to undertake the research. The target population for the study was management staff of both banks located in Addis Abeba. The research used a structured questionnaire to collect primary data. The research also used secondary source documents in reviewing the actual performance of the banks under study to assess the effectiveness of the generic strategies on their performance. The data gathered then analyzed using descriptive statistics based on summarized comparisons using percentages, ratios with the help of a computational software SPSS. The findings of this study have suggested that the banks under study are facing challenges due to competition and the majority of the respondents indicated that their bank applied generic strategy to mitigate the challenge. The findings also indicated that the two banks account for one third of the private banks market share in terms of total asset, net income and paid up capital. According to the research findings the significant challenges identified while implementing competitive strategies were growing needs of customers, imitation of banking services, unethical move and loss of skilled employees to competitors. The findings show a significant relationship between the strategies adopted by Awash International Bank and Dashen Bank vis a vis the their performances with respect to the following performance indicators: total asset growth as compared to the industry growth, net income growth as compared to the industry growth, earnings per share as compared to the industry earnings per share. The outcome of the study revealed that there is a positive association between the adopted competitive strategies and performance. The banks under study need to pursue mixed generic strategy to have a better performance.
Description: A Thesis Submitted to School of Graduate Studies of Addis Ababa University in Partial Fulfillment of the Requirements for the Degree of Executive Masters of Business Administration
Appears in Collections:Thesis - Business Adminstration

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