WHAT DOES IT TAKE TO BE THE DOMINANT COMMERCIAL BANK IN THE BAHRAIN MARKET An Exploratory Study

Abstract

Abstract : The world around us is changing very rapidly, globalization and the dismantling of trade barriers are giving customers far more power than they ever had. These changes are forcing service providers to re-examine their strategies and core competencies as the battle shifts towards customer's satisfaction and loyalty which western literature argues that it can be achieved through superior service quality. The aim of the study was to explore concepts of service quality and customer loyalty that are researched and applied in the west, and determine whether customers in the Bahrain commercial banking sector are aware of them or are sensitive to them. The study also aimed at predicting which components can contribute to better financial performance and/or a sustainable competitive advantage for one or more of the key commercial banks in Bahrain. The research identified three commercial banks that capture about 60% of the market and surveyed 223 individuals dealing with them through a questionnaire survey. A number of short unstructured interviews and a main interview were conducted to validate, clarify and expand the understanding of the data. The study used the approach of triangulation to enrich the findings. Findings of the study clearly point to the sensitivity of the commercial banking customers in Bahrain to many components of service quality and loyalty as known in the west; it also demonstrated preference of customers to certain banks. This information was used to predict how one of the banks can improve their competitive advantage and achieve better financial performance from their peers. As an exploratory study, this research can be used as a stepping stone for further research in the field of service quality and customer behavior in Bahrain or the neighboring countries. It also may be used as a valuable source of customer data for any of the three banks focused on in the research to achieve better financial performance or a competitive advantage.