Strategic Innovation Practices And Competitive Advantage Of Listed Commercial Banks In Kenya
Abstract
Strategic innovation practices can generate competitive advantage; improve organization performance and its effectiveness. Strategic innovation strategies have been used as aspects in the direction of realizing competitive advantage for firms over economies of scale and other interactions from using the firm’s possessions and competences through different innovative lines. The objectives of the study were: To establish the innovation practices embraced by listed commercial banks in Kenya and to establish the influence of strategic innovation practices on competitive advantage of listed commercial banks in Kenya. The study was built on two different theories specifically resource based theory and Innovation Diffusion Theory. This study adopted cross sectional survey as the research design which is descriptive in nature. Population under study comprises listed commercial banks in Nairobi Stock Exchange. There were 42 banks and 7 representative offices of foreign banks. The respondents thus consisted of staff from the three segregations in commercial banks; senior level managers, middle managers and the supervisors. Primary data was collected and used in this study. Data that was collected included the strategic innovation state, products and networks, competitive advantage and production performance. Three respondents were chosen from each organization upon which the questionnaire was administered through interactive personal interviews. Informed consent forms were obtained before data is collected. Descriptive statistics analysis was carried out to provide summarised organizational demographics. Content analysis was used to analyse the respondents view about the relationship between the strategic innovation practices and competitive advantage of the listed commercial banks in Kenya. Data was analysed using the regression analysis since the study involves one dependent variable and many independent variables. Multiple regression analysis was used to analyse if there is a relationship that exist between one dependent variable and three independent variables. The study found that the product innovation have been communicated to the staff greatly. Further the study revealed that product range and that profitability have increased greatly since the commercial banks started innovation. It was finally indicated that customer loyalty have moderately increased while products development and market Share had increased in a little extent since commercial banks started innovation. The study concluded that technology innovation had the greatest effect on the competitive advantage, followed by product innovation while service innovation had the least effect to the competitive advantage of commercial banks. The study management of the listed commercial banks should adopt innovation strategies to improve on their general competitive advantage, that management of listed commercial banks should investigate ways of reducing challenges facing the implementation of innovation strategies such as lack of top management’s commitment to the innovation strategies and lack of mutual coordination and inadequate planning and that listed commercial banks must take immediate steps to improve innovation by critically assessing current innovation capabilities and performance, should create an enable environment that will enhance innovations in the bank so that full benefits of innovation strategies may be realized
Publisher
University of Nairobi
Subject
Commercial Banks In KenyaRights
Attribution-NonCommercial-NoDerivs 3.0 United StatesUsage Rights
http://creativecommons.org/licenses/by-nc-nd/3.0/us/Collections
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