INNOVATION STRATEGY AND PERFORMANCE OF MANUFACTURING SMALL AND MEDIUM ENTERPRISES IN KENYA
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Abstract
This study sought to examine the role of innovation strategy on performance of SMEs in Kenya. The study applied Innovation theory. The population of the study was manufacturing SMEs in Nairobi City County, Kenya since Nairobi is a cosmopolitan that is home to several manufacturing SMEs. Respondents’ population was 538 manufacturing SMEs in Nairobi City County, Kenya. The top managers were targeted because strategic management issues are mostly handled by top managers of organizations. Stratified sampling was used to pick the sample. The population was stratified based on the sectors. KMA has divided the manufacturing into sectors. The philosophy that guided the research is positivism philosophy. The study used cross-sectional survey design to establish the role of innovation strategy implementation on competitive performance of manufacturing SMEs in Kenya. The study also used both qualitative and quantitative mixed methods. In this research cross sectional survey design was employed. This study used a questionnaire to collect data. A pilot study was conducted to ascertain the research instruments' validity and reliability. Data was analyzed using the Statistical Package for Social Sciences (SPSS) version 25 software. Qualitative data collected was analyzed using thematic analysis and presented in prose form. Quantitative data was analyzed using descriptive statistics and presented in tables and figures. The study also computed correlation and regression analysis to test the relationship between study variables and test the research hypothesis. The study also concludes that innovation strategy has a positive and significant effect on the performance of manufacturing SMEs in Kenya. The study revealed that new products, new markets, and product development influence the performance of manufacturing SMEs in Kenya. This implies that improving innovation strategy (new products, new markets, and product development) would improve manufacturing SMEs' performance in Kenya. This study, therefore, recommends that the management of manufacturing SMEs in Kenya should promote an innovative work environment
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