Influence of innovation strategies on the performance of firm’s listed in Nairobi securities exchange, Kenya

Abstract

Strategy is the direction and scope of an organization over the long term which achieves advantage in a changing environment through its configuration of resources and competences with the aim of fulfilling stakeholders’ expectations. However, research on predictive power of innovative strategies on the performance of firms listed in the NSE is inadequate. This study aimed at exploring this area in the hope of providing important answers to how innovation can be used to leverage performance of organizations in Kenya. The general objective of the study was to investigate effects of various innovation strategies on the performance of firms listed in the NSE. The study adopted a descriptive and inferential research design; the target population for the study was the 61 organizations, where a sample of 53 respondents were selected using simple random sampling technique. In order to collect the relevant data, a semi-structured questionnaire was used. To ascertain the validity and reliability of questionnaire, a pilot survey was conducted. The questionnaires were administered to the sampled respondents. Statistical analyses were conducted using statistical package for social sciences (SPSS) to calculate descriptive statistics, analysis and regression. The Model summary of the regression analysis showed that all the independent variables accounted for 72.4% of the variance in firm performance. Technological strategies, Product development strategies, market strategies and Process strategies were found to have a positive correlation with the performance of firms in NSE. The study recommended that Firms in service industry could make significant gains by pursuing product and process innovations. This is because the impact on performance is much more significant given the nature of the industry. Technological innovations rank higher probably because the market has matured and hence cost savings derived from innovative processes become more attractive for growth.