Innovation strategies and entrepreneurial performance of selected small and medium enterprises in Nakuru town east sub-county, Kenya.
Okundi, Susan Major
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The economic development of a country is determined by various key roles played by SMEs. They contribute approximately 40% of the GDP and create 80% of jobs. However, SMEs have been facing performance challenges which threaten their sustainability based on entrepreneurial abilities. Therefore, it is in the interest of the Kenyan government, organizational philosophers, managers and equally entrepreneurs who have long shown more interest in innovation in SMEs, predominantly due to the vital role innovation plays in safeguarding sustained competitive gain. In consequence of the increase in competition levels, it is therefore necessary to identify appropriate innovation strategies that would make their product and services competitive in the market in which they operate in. Thus, this study’s objective was to define and determine the effect of innovation strategies and entrepreneurial performance of selected SMEs in Nakuru Town East Sub-County, Kenya because of the high rate of SMEs decline in the area and the variability in the entrepreneurial nature. This study’s specific objectives were the effect of Product Innovation Strategy, Process Innovation Strategy, Marketing Innovation Strategy and Organization Innovation Strategy on entrepreneurial performance of selected SMEs in Nakuru Town East Sub-County, Kenya. The hinges of this study used three theories including: Resource-based View for knowing the significant resources being used to improve performance; diffusion of innovation theory for SMEs to observe the adoption process of products into the market; and balance scorecard to understand how SMEs accomplish their goals by use of performance measures. The study engaged a descriptive and explanatory research design that targeted 126 respondents who are 10% of the selected registered 1,259 SMEs in Nakuru Town East Sub-County that have single business permits operating in the area including: wholesalers and retailers, fishmongers, salons and barbershops, cybercafés, hotels and cafes, construction, and hardware stores. A questionnaire which had open and close ended questions was adopted and administered using drop-and-pick later methods for some, and for others, the researcher herself used an interview schedule. The respondents of the study were the owner or the in-charge/manager of the SME. The questionnaire was piloted to determine validity and to establish whether the questions will measure the expected theorized variables. According to the findings, all of the items' Cronbach's Alpha values were greater than 0.7 indicating that the questionnaires used to collect the data were reliable. The data collected was quantitative and was analyzed using descriptive and inferential statistics. According to the findings, there is a strong positive and significant relationship between product, process, marketing, organization innovation strategies and entrepreneurial performance of SMEs in Nakuru Town East Sub-County. Based on these conclusions, the study recommends that SMEs business owners should consider introducing new products to generate more profit, improving the delivery process and finding new markets for the products to grow in the market share; and implementing changes in the workplace routines to improve efficiency. A suggestion that further studies be conducted on county level and the Government of Kenya provide resources for research and development of such studies, then the findings implemented by putting policies to govern SMEs performance.