THE EFFECTS OF COMPETITIVE STRATEGIES ON THE BANKING INDUSTRY PERFORMANCE IN TANZANIA

The study assessed the effects of competitive strategies on banking industry performance in Tanzania with CRDB Bank being a case study. The study was mainly led by three study constructs as predicting variables to the banking performance in Tanzania which are differentiation strategies, cost leadership strategies and focus strategies. The study was undertaken using 120 randomly selected respondents and 5 key informants. The study was analyzed both quantitatively and qualitatively. Quantitative analysis was done through the help of SPSS software version 22.0 where multiple regression analysis was computed to establish the relationship between the three explanatory variables and a dependent variable. Qualitative data analysis involved in-depth interview from 5 key informants. In that case, descriptive statistics were generated which presented the profile of the respondents. In addition to that, correlation and multiple regression analysis were performed to show the existing relationship between study variables. The Findings of the study reveal that two constructs which are cost leadership and focus strategies are positive and statistically significant on the banking performance. Despite that, differentiation strategies as the construct is positive and statistically insignificant on banking performance. The implication of the study findings is that banking performance among commercial banks in Tanzania using competitive strategies is influenced by cost leadership and focus strategies. The study therefore recommends that commercial banks should stick towards developing competitive strategies geared towards cost reduction and effective focus on specific target markets.