Innovation Strategy and Competitiveness of Fintech Companies in Nairobi, Kenya

Abstract

The objective of the research was to determine the effect of innovation strategies on the competitiveness of fintech companies in Kenya. The independent variables were proxied by five variables, namely; new product development, product improvement, improvement on competitor ideas, process and marketing innovation. The research adopted the descriptive research design in a population of 38 fintech firms in Nairobi, Kenya. The new product development innovation strategy among the fintech firms involved being able to offer products that unique and that have been innovated and produced internally within the organization and more so are tailored to be user friendly. Similarly, to increase the competitiveness of their firms, the popular activities undertaken within the quest to introduce new products involved increasing their product delivery speed, reliability and employee’s competence through training. A positive correlation was also found between the variables and the innovation strategies explained 67.2% of the fintech firm’s competitiveness. Further, the findings reveal that two of the variables were significant in influencing the competitiveness of the firms because their p-values were less than 0.05. The significant variables were product development and product improvement. Otherwise, the improvement of competitor ideas, process innovation and marketing innovation was found not to be significant factor on the fintech firms’ competitiveness. The results reveal that new product innovation and improvement on existing product were found to significantly affect the competitiveness of a firm. Therefore, the assertion that the ability of a firm to introduce new and imitable products or be able to introduce new and smaller changes on the existing product reinforce the view that internal sources that cannot be replicated forms an important source of competitive advantage to a firm. The research finds that product and process innovation had a remarkable effect on the competitiveness of the fintech firms in Kenya and consequently the research recommends that greater attention be directed towards improvement of the organization process, both the back and front office functions to meet customer satisfaction. In addition, the study recommends that fintech firms continuously endeavor to come up with new products or improve on the existing ones since majority of the products are digital based and consequently continuously change. Keywords: Fintech firms, innovation, competitiveness, product, process