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Value Co-Creation and Competitive Advantage: A Study of Firms in the Financial Services Sector in Kenya

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dc.contributor.author Muhonza, Prescott Butoyi
dc.date.accessioned 2022-03-22T08:12:21Z
dc.date.available 2022-03-22T08:12:21Z
dc.date.issued 2021
dc.identifier.uri http://erepo.usiu.ac.ke/11732/6929
dc.description A Dissertation Report Submitted to the Chandaria School of Business in Partial Fulfillment of the Requirement for the Degree of Doctor of Business Administration (DBA) en_US
dc.description.abstract The general objective of this study was to determine the influence of value co-creation on the competitive advantage of firms in the financial services sector in Kenya, focusing specifically on banking, microfinance, and savings and credit societies institutions in Kenya. The specific objective of the study was to examine the influence of each of the value co-creation attributes derived from the Customer Relationship Management model; business vision, industry and competitive characteristics, value proposition, and value assessment on the competitive advantage of firms in the financial services sector in Kenya. The motivation of this study was derived from the evaluation of the need for firms’ management desire to consistently develop solutions for customers that keep them ahead of the competition and the growing need for co-creation of value that gives a firm a competitive advantage. The theories underpinning this study are the co-creation theory, resource-based view theory, and knowledge-based view theories. The study was guided by the positivism philosophy. The research design used were descriptive and explanatory research designs, and the technique used was cross-sectional. The study population was the management staff in the firms that operate in the financial services sector: 42 institutions in the inking sector, 12 microfinance institutions, and 147 savings and credit societies. From this population, 1356 management staff were the target respondents, and the study sample size was 340 managers in the financial services sector in Kenya. The sampling technique wed was Multi-stage sampling stratified random sampling of the financial institutions, proportionate sampling of the number of managers and simple random sampling of the respondents. Quantitative data was collected by the use of closed-ended questionnaires. The study obtained a response rate of 92% Data was coded and entered in SPSS for analysis, and the unit of analysis was firms in the financial services sector. The descriptive statistics med were mean, standard deviation, and percentages, while the inferential statistics used were factor analysis, correlation coefficient, analysis of variance (ANOVA), and regressions analysis. The analyzed data was presented in tables and figures. The first objective was to examine the effect of business vision on competitive advantage in the financial services sector. The research found out all the components of business vision had a positive and significant correlation with the competitive advantage parameters: shared vision r (306) =.565, pc: .05; farm culture and values, r (306) =.583, p<.05; visionary leadership (306) =.522, p<.05. This shows that an increase in competitive advantage positively and significantly influences the business vision parameters. On the test of hypothesis, the study found out that business vision has a significant influence on the realization of competitive advantage (β= .647 e= 14.801, p<:.05) hence rejected the null hypothesis of the study. The second objective was to examine the effect of industry and competitive characteristics on competitive advantage in the financial services sector. The research found that agility, competitive forces, and dynamic capabilities as independent variable constructs had a positive and significant correlation with the competitive advantage; agility r (306) =592, p<.05; competitive forces, r (306) =.540, p<.05; dynamic capabilities (306) =.587, p‹.05. This shows that an increase in competitive advantage positively and significantly influences the industry and competitive characteristic parameters. On the test of hypothesis, the study found out that the industry and competitive characteristics has a significant influence on the achievement of competitive advantage (β= .687 t = 16.472, p‹.05) hence rejected the null hypothesis of the study. The third objective was to investigate the effect of value proposition on competitive advantage in the financial services sector. The research found out engagement between actors, reciprocal attributes, intensity and mutual communication and lastly, the actor commitment as independent variable constructs had a positive and significant correlation with the competitive advantage; engagement between actors r (304)=.548, p<.05; reciprocal attributes, r (306)=.708. p<.05; intensity and mutual communication r (306) =.514, p<.05 and actor commitment r (306) =.556, p<.05. This shows that an increase in competitive advantage has a positive and significant influence on the value proposition parameters. On the test of hypothesis, the study found out Value proposition has a significant influence on the attainment of competitive advantage (β=.716 r =17.886. p‹.05) hence rejected the null hypothesis of the study. The fourth objective was to examine the effect of value assessment on competitive advantage in the financial services sector. The research found out customer-centric, value in exchange and relationship nine as independent variable constructs had positive and significant correlation with the competitive advantage: customer-centric r (305) =.608, p<.05; value in exchange, r (305) =.515,p<.05; relationship value r (305) =559, p<.05. This shows that an increase in competitive advantage has a positive and significant influence on the value re-el-float parameters. On the test of hypothesis, the study found out Value assessment has a significant influence on competitive advantage (β= .682 t= 16.224, p<.05) hence rejected the null hypothesis of study. The last objective was to assess the moderating role of management commitment on co-creation and the achievement of competitive advantage. The Management commitment as moderating variable had significant influence on value co-creation relation with competitive advantage (β= .366, t = 6.241. p<.05). All the value co-creation variables influenced the competitive advantage without the management commitment as moderating variable. However, with the inclusion of the management commitment, business vision and value assessment have no significant influence on competitive advantage. Thus, the study rejected the null hypothesis of the study. The study concluded that business vision, industry and competitive characteristics, value proposition and table assessment are essential in assisting firms to obtain a competitive advantage in the collaborative engagement that is co-creation. However, with the presence of management commitment in the collaborative engagement, the business vision and value assessment become less important and value proposition and industry and competitive characteristics become more important for firm management. The study recommends that managers play an active role in sharing the corporate and team vision beyond their routine tat in management to enhance the psychological attachment of their team members to their organization. Managers should consider agility as a predominant principle guiding strategic and operational activities in the business environment on industry and competitive characteristics. Companies should create a balanced and reciprocal co-creation where the customer plays a more dynamic role in the value co-creation process and steer its progression more actively towards greater value realization. Lastly, managers should develop policies that focus on value assessment bred on personal perspective. This coalesces to influence the behaviors and attitudes that underpin the relationship and it ongoing value creation propensity, underscoring managers' need to better understand how these subjective evaluations are formed and evolve in enhancing relationship value. To the body of knowledge, the study introduces additional dimensions and viewpoints to the discussion of value co-creation in addition to the Dialogue, Access. Risk-assessment and Transparency (DART) model through the Payne Customer Relationship Management (CRM) model. The study expands the discussion of value co-creation as a CRM model via the construct of business vision industry and competitive characteristics, value proposition, and value assessment. The moderating role of management commitment in the generation of competitive advantage is an additional contribution of this study to the body of knowledge. en_US
dc.publisher United States International University - Africa en_US
dc.subject Value Co-Creation en_US
dc.subject Competitive Advantage en_US
dc.subject Firms en_US
dc.subject Financial Services Sector en_US
dc.subject Kenya en_US
dc.title Value Co-Creation and Competitive Advantage: A Study of Firms in the Financial Services Sector in Kenya en_US
dc.type Thesis en_US


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