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Business Model Innovation and Sustainability of Small and Medium Enterprises

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dc.contributor.author Muugi, Grace Hiuko
dc.date.accessioned 2018-10-24T08:37:33Z
dc.date.available 2018-10-24T08:37:33Z
dc.date.issued 2018
dc.identifier.uri http://erepo.usiu.ac.ke/11732/4051
dc.description A Research Project Report Submitted to the Chandaria School of Business in Partial Fulfillment of the Requirement for the Degree of Masters in Business Administration (MBA) en_US
dc.description.abstract This study was meant to investigate Business model innovation and sustainability of small medium sized enterprises. The General objective of this study was to analyze Business Model Innovation and sustainability of small and medium Enterprises. The study explored three independent variables as the main objectives. They included Value Creation Innovation variable that was used to determine the effect of value creation innovation on SME sustainability, Value Proposition Innovation variable that was used to determine the effect of value proposition on SME sustainability and Value Capture Innovation variable that was used to determine the effect of Value Capture Innovation on SME sustainability. The study then used Organizations competitive advantage variable as the dependent variable that was used to measure Sustainability of SMEs. The research focused on SMEs, in Nairobi and Kiambu counties in Kenya. The research targeted small and medium sized business owners or managers at USIU-A. The study was done by administering 200 questionnaires, where 150 were returned. The response rate was 75% which was sufficient enough to analysis the data in figures and tables. The study used inferential statistics in two phases; the first stage was the assessment of the measurement model that involved factor analysis which encompassed exploratory and confirmatory factor analysis .The second phase contained the estimation of the structural model. The Exploratory factor analysis (EFA) through Principal components analysis (PCA) extraction method was conducted to measure the essential dimension associated with 39 items. The factor loading of all items of each scale were above 0.6 which exceeded the threshold 0.5 indicating the evidence of convergent validity. Reliability for the constructs was tested using composite reliability and Cronbach's Alpha. Construct Validity was assessed by convergent and discriminant validity. Average variance extracted (AVE) was used to measure both convergent and discriminant validity. Adequate levels of convergent validity were achieved as AVE’s for the specific constructs was above the threshold 0.5. Discriminant validity was realised as the values of maximum shared variance (MSV) were less than the values of AVE .The correlation coefficients showed Value Capture Innovation was found to be positive and significantly related to Organisations Competitive Advantage (r=0.270, p-value<0.05). Value Proposition Innovation was found to be positive and significantly related to Organisations Competitive Advantage (r=0.390, p-value<0.05). Value Creation Innovation was found to be positive and significantly related to Organisations Competitive Advantage (r=0.310, p-value<0.05). Skewness and kurtosis statistics were computed to assess the normality of the study variables. The results of the normality test of the study variables indicated skewness and kurtosis in the range of -1 and +1 as shown in table 4.8. This implied that the assumption of normality was satisfied. The structural model was estimated to find the estimates of the relationships between study variables. The model’s fit indices of 𝝌𝟐=335.921; df=207; 𝝌𝟐/𝑑𝑓=1.623; CFI=.940; GFI=.927; RMSEA=0.067 and PCLOSE=0.064 were adequate suggesting a reasonable good –fitting model. The quality of the structural model was explained by the value of r square on the endogenous latent variable. The predictive power of the model was 40%.Innovation (Beta=0.304) and the least important was Value Capture Innovation (Beta=0.197).The regression weight for Value Capture Innovation was positive and significant (β= 0.423, t= 5.924, p < .05). This indicated that a unit increase in Value Capture Innovation would result in 42.3% increase in Organizations Competitive Advantage. The regression weight for Value Proposition Innovation was positive and significant (β= 0.304, t= 3.452, p < .05). This indicated that a unit increase in Value Proposition Innovation would result in 30.4% increase in Organizations Competitive Advantage. The regression weight for Value Capture Innovation was positive and significant (β= 0.197, t= 2.234, p < .05). This indicated that a unit increase in Value Capture Innovation would result in 19.7% increase in Organizations Competitive Advantage. The beta values indicate the predictive importance of the indicators, Value Creation Innovation was the most important predictor (Beta=0.423) followed by Value Proposition. This was a clear correlation and relationship of the effects of business model innovation on sustainability of SMEs. en_US
dc.language.iso en en_US
dc.publisher United States International University - Africa en_US
dc.subject Business Model Innovation en_US
dc.subject Sustainability en_US
dc.subject Small and Medium Enterprises en_US
dc.title Business Model Innovation and Sustainability of Small and Medium Enterprises en_US
dc.type Thesis en_US


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