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Effects of Innovation Strategy in Enhancing Competitive Advantage among Commercial Banks in Kenya

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dc.contributor.author Kariuki, Anthony N.
dc.date.accessioned 2017-08-22T07:35:07Z
dc.date.available 2017-08-22T07:35:07Z
dc.date.issued 2017
dc.identifier.uri http://erepo.usiu.ac.ke/11732/3291
dc.description A Research Project Report Submitted to Chandaria School of Business in Partial Fulfilment of Requirement for the Degree of Master of Business Administration (MBA) en_US
dc.description.abstract The purpose of this study was to determine the effects of innovation strategy on competitive advantage in commercial banks. The following research questions were adopted for the study: What is the effect of product innovation on competitive advantage? What is the effect of process innovation on competitive advantage? How does market innovation affect competitive advantage of commercial banks in Kenya? The study employed a descriptive survey research design. The population of the study was 330 composed of managers from 44 commercial banks in Kenya. Stratified sampling was used to select a sample size of 118. The study used a structured questionnaire to collect primary data, which was analyzed using Statistical Package for Social Sciences (SPSS) version 22 for descriptive and inferential statistics. The findings on the effect of product innovation on competitive advantage revealed the existence of a positive significant relationship between product innovation and competitive advantage of commercial banks in Kenya. The findings on the effect of process innovation on competitive advantage revealed the existence of a positive significant relationship between process innovation and competitive advantage. All the components of process innovation including process idea phase, development phase and implementation phase were all significant. The findings on the effect of market innovation on competitive advantage revealed the existence of a positive significant relationship between market innovation and competitive advantage. All components of market innovation including impact on employee performance, organizational performance, employee motivation, and increase in sales were all significant. This study concludes that product innovation has significant impact on employee performance, satisfaction, and organizational performance. Product innovation directly and positively contributes to how employees find value, morale and significance in their work, which at the end of the day, enhances their productivity, and competitiveness in the market place. The study also concludes that process innovation including planning, design and implementation effect on customer satisfaction, employee performance and organization profitability was significant. Product innovation provided commercial banks under this study with the opportunity and ability to design products that competed effectively at the market place and thus enhancing organizations competitive advantage. This study also concludes that all components of market innovation including customer satisfaction, employee performance and overall organization performance were significant. Market innovations provide banks the opportunity to enhance their performance through increase in market share, and product differentiation to the market. This study recommends that management in commercial banks should but mechanisms in place to enhance more internal innovations. This should include giving employees enough space to innovate new products and services. In addition, there is need to have banks to set aside a budget that will be used exclusively for product innovation. This will not only enhance the banks’ ability to compete with other banks, but also the ability to remain sustainable in the long term. This study also recommends that management at commercial banks should ensure that process innovations are conducted in a manner that enhances competitive advantage. This should include ensuring that organizational processes are designed in a manner that enhances organizations strategic goals and objectives. There is need to ensure that employees are customers are involved in all aspects process innovation. Lack employee involvement can be detrimental to the success of the innovation process and thus hinder competitiveness. On market innovativeness, this study recommends the use of agency banking to enhance outreach to those in areas that does not have physical branches. There is also need for commercial banks to ensure that online banking platforms in addition to mobile money platforms should be enhanced. en_US
dc.language.iso en en_US
dc.publisher United States International University - Africa en_US
dc.subject Innovation Strategy en_US
dc.subject Competitive Advantage en_US
dc.subject Commercial Banks in Kenya en_US
dc.title Effects of Innovation Strategy in Enhancing Competitive Advantage among Commercial Banks in Kenya en_US
dc.type Thesis en_US


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