Relationship Between Innovation Strategies and Competitive Advantage in the Logistics Firms in Mombasa County, Kenya

Abstract

Any organization that is keen on competing in the dynamic markets must create a special edge that allows it to derive a competitive advantage over rivals. One way of gaining superiority over rivals is through innovation. Innovation as a strategy involves creating new ideas, processes and ways of doing things that improves current goods and services or bringing into new, products and services. Innovation in firms is necessary in order to defend their existing competitive position and competitive advantages to be gained. Logistics firms located in Mombasa County are not exceptional in this regard. The study sought to establish the innovation strategies used by logistics firms in Mombasa County and if any relationship existed between those innovation strategies and competitive advantage of the Logistics firms. A cross sectional descriptive survey design was used and a five point Likert scale questionnaires developed to collect primary data from respondents. The population was 876 logistics firms and sample size was 60. Regression analysis was used in the data analysis. 44 logistic firms responded giving a response rate of 73%. Results obtained indicated that Logistic firms in Mombasa County utilized innovation strategies namely; product innovation strategies, process innovation strategies, market innovation and organizational innovation strategies. Overall, it was shown that innovation strategies influence competitive advantage in Logistic firms in Mombasa County, Kenya. Product innovation strategy had a positive and significant effect (5% significance level) on competitive advantage since one unit increase in innovation strategy increased competitive advantage by 0.359 units. Similarly, one unit increase in market innovation strategy increased competitive advantage by 0.126 units. When process innovation strategy increased by one unit, competitive advantage decreased by 0.061 units. Finally when organization innovation strategy increased by one unit, competitive advantage increased by 0.081 units. The study concludes that product innovation is critical in enhancing competitive advantage of logistic firms in Mombasa County as an increase in product innovation leads to a significant increase in competitive advantage and therefore, competitive advantage level variability decisions should take into account implications of innovation strategies for logistic firms.