Dynamic capabilities, service quality and competitive advantage of commercial banks in Kampala-Uganda

Abstract

This research aimed at examining the contribution of dynamic capabilities and service quality on competitive advantage of commercial banks in Kampala; The study premised on three objectives; to establish the relationship between dynamic capability and competitive advantage, to investigate the relationship between service quality and competitive advantage and to examine the combined effect of dynamic capability and service quality on competitive advantage of commercial banks in Kampala, Uganda. The study employed a cross-sectional and correlational survey research with a quantitative study approach which involved collecting numerical data from 99 respondents out of a sample of 104 staff who included branch managers, supervisors, relationship managers and customer service managers at different bank branches of Opportunity Bank, Cairo bank of Uganda and UBA bank, using a survey questionnaire. Data were analyzed using the statistical package for social science (SSPS Version 23). The study revealed that dynamic capabilities (r=.665), service quality (r=.614) and their combination (r=0.663) influence competitive advantage among commercial banks. The results imply that commercial banks may become more competitive when they apply dynamic capabilities and high-quality service. The study therefore, recommended management of banking institutions to increase their innovativeness and proactively think regarding strategic management and ensure that their strategies are effective and differentiated. Furthermore, the management of banks to conduct in-depth research and establish what their customers consider to be quality service. This study is relevant in informing the commercial banks on how to improve their competitiveness and services delivered to their customers. This study will be important to the management of banks under study, the banking industry and bank regulators.