Innovation Strategies and Performance of Equity Bank in Laikipia County, Kenya.
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Date
2024-08
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Kenyatta University
Abstract
Banks and other financial institutions have been established from global, regional and local perspectives to have adopted various innovation strategies in an attempt to enhance performance. Commercial banks are crucial contributors to the global economy due to their essential role in financial intermediation. Majority of commercial banks are currently experiencing financial difficulties, marked by declining returns on equity and assets, primarily attributed to their limited implementation of innovation strategies. Therefore, the research intends to examine effects of innovation strategies on performances of Equity Banks in Laikipia County, Kenya. The research particularly intended to determine how product, organization, process and marketing innovations affect performance of Equity banks in Laikipia County. The research was based on balanced scorecard, evolution and innovation diffusion theories. Descriptive and causal research was utilized. Targeted population was 139 management staff from three Equity Bank branches in Laikipia County. Stratified and simple random sampling was utilized in selecting 103 participants for the study. The data was obtained through structured questionnaire. Pilot study was done to check for validities and reliabilities of questionnaire. Factor analysis was utilized for testing validity of the questionnaire. Further, Cronbach’s alpha of 0.7% internal consistency was utilized to check for reliability of questionnaire. The questionnaires were personally distributed to the management staff by the researcher. After data collection, questionnaires were recorded and questions coded for easier data entry into SPSS. Then, data cleaning was done which entailed removal of unfilled questionnaires and rectifying errors in data entry. Further, quantitative data analysis was done through descriptives such as frequencies, percentages, mean and standard deviation while inferential statistics include correlation and regression analysis. The research found that the unit change in product innovation would lead to 0.797 significant changes in performance of Equity banks in Laikipia county. It was clear that a unit change organizational innovation would lead to 0.772 significant increase in performances of Equity banks in Laikipia county. It was revealed that process innovation leads to 0.807 significant increase in performances of Equity banks in Laikipia county. The study showed that market innovation would lead to 0.638 significant changes in performance of Equity banks in Laikipia county. The study concluded that innovation strategies such as product innovations, organizational innovations, process innovations and market innovations have significant effects on performances of Equity banks in Laikipia County, Kenya. The study also recommends that management of Equity bank need to come with strategies to ensure that the online banking portals are user-friendly. There is also need for Equity bank to regularly conduct customer satisfaction surveys to identify products and services that needs to be introduced. It was recommended that managers of equity banks in Laikipia county needs to initiate and implement financial literacy programs among customers and also offer refresher courses for its employees to enhance their innovative skills. The study recommends that management of Equity banks needs to formulate strategies to ensure that every branch in Laikipia county has its own active social media platforms. The study also recommends that equity banks in Laikipia county should continue investing in digital marketing by leveraging on emerging social media platforms such as TikTok.
Description
A Research Project Submitted to the School of Business, Economics and Tourism in Partial Fulfilment of the Requirement for the Award of the Degree of Master of Business Administration (Strategic Management) of Kenyatta University, September, 2024
Supervisor:
1.John Mutinda