IOSR Journal of Business and Management (IOSR-JBM) e-ISSN: 2278-487X, p-ISSN: 2319-7668. Volume 17, Issue 2.Ver. I (Feb. 2015), PP 77-89 www.iosrjournals.org DOI: 10.9790/487X-17217789 www.iosrjournals.org 77 | Page Effects of Strategic Procurement on Competitiveness of Commercial Banks Operating In Kenya A Case Study Of Standard Chartered Bank Limited Kenya Timothy Tarus Seurey Jomo Kenyatta University of Agriculture and Technology, Kenya Abstract: Material price volatility, pressure on profits, increasing risk profiles in global markets, a depressing need to innovate and become more sustainable. These are causing executive management to take another look at the contributions procurement departments are making and not just to cost savings. Generating cash by reducing costs may always be the main duty. But the other contributions procurement can make are substantial, from product and service innovations to enhanced productivity to shortened delivery times (Hoek 2011). This study looked into the effects of strategic procurement on competitivess of commercial Banks operating Kenya. The target population for this study was employees of Standard Chartered Bank Kenya based in Nairobi. The target population consisted of all cadres of employees. The bank has a total of 482 employees with procurement rights of whom 304 are based in Nairobi and were the target population for this study. The primary data was collected by use of questionnaires. A descriptive design was used to collect both qualitative and quantitative data. Data was coded, cleared and entered using statistical package for social sciences (SPSS) version 22. The results was analyzed and results presented using tables and figures. The study also used Pearson coefficient to establish the relationship between the variables. The study established that strategic procurement indeed influences competitiveness of commercial banks operating in Kenya. Strategic procurement was viewed as non- strategic level amongst commercial banks operating in Kenya. Strategic sourcing has not been embraced in sourcing of materials and services, supply chain management is regarded as a strategic senior level position. E-procurement is not well utilised in cost cutting and reduction of turnaround time with employees lacking adequate knowledge regarding E-procurement and its operations. However the firm doesn’t believe is supplier development and partnership. Keywords: strategic sourcing, supply chain management, E- procurement, supplier relationship management. I. Introduction That bank executives generally tend to ignore the strategic relevance of procurement should hardly be a surprise. Their focus is on growing market share, on the net consequence, they recruit, train, and compensate their personnel to fulfill core banking activities: collecting deposits, lending money, providing fee-based services. Moreover, during their careers, banking executives generally ascend through a series of line positions: credit, deposits, investments, commercial services, accounting, and marketing. It is a safe bet, however, that no bank president has ever done a stint in purchasing, which is unfortunate in that it ignores what banks spend the most money on day-in and day-out (FIS Consulting 2012). Strategic procurement can be approached from three main dimensions namely: Development and management of key suppliers, internal operation of procurement function and coordination of purchasing with other functions within the firm, and efforts to meet or exceed customer expectations. It is seen as one of the critical function of an organization with the potential to; save cost, improve operational efficiency, access to trusted suppliers, and improve in quality of product or service, sharing of best practices among others (Magnus, B. 2006). The representation of the strategic procurement can be described in terms of its environment and structure, and what activities take place in the supply link. General performance indicators of the supply link in terms of time, quality, flexibility and cost are used to measure efficiency and effectiveness. The efficiency in the supply link explains how well the resources are utilized. Since resources are scarce, it is in everyone‘s interest in the organization to maximize the utilization of the resources. The effectiveness of the supply link explains how well the objectives are achieved (Arun, K. and Linet, O. 2005). In developing an effective strategy that enhances a company‘s long-term profitability, Porter (1979) suggested that a firm must position itself where the forces of competition are weakest, exploit changes in the forces and reshape the forces in their favour. Porter argues that there are five competitive forces that shape strategy; powerful customers, powerful suppliers, threat of new entrants, threat of substitutes and rivalry among existing competitors.Awareness of the five forces can help an organization understand the structure of its industry and stakeout a position that is more profitable in the long-term and less vulnerable to threats. The strongest competitive force or forces determine the profitability of an industry and become the most important