Innovation Strategies and the Growth of Real Estate Developers in Nairobi County

Abstract

The need for property market in Nairobi has in the last 10 years thrived to an all time high. In 2010 Nairobi recorded the highest growth in luxury house prices in the world. A study by Knight Frank found that the prices for real estate increased by 25% in 2011. The study aimed at investigating the influence of innovation strategies on the growth of real estate development in Nairobi County. This study describes a phenomenon hence it used descriptive cross sectional survey research design. The population of this study comprised of all players in the industry who include; contractors, developers and financiers located in Nairobi County; however the study concentrated on developers only. According to the 201112012 issue of the Real Estate Developers Index, Nairobi County was home to over 65 real estate developers. Since the population was small the study targeted all the CEOs of the real estate (see appendix B). Therefore for the case of this study it was appropriate for researcher to choose census method since the population was small and the firms were easily accessible. The researcher used a questionnaire as a primary data collection instrument. Secondary data was collected from Economic Survey 2013 Kenya, National special data systems at the Ministry of lands. Data collected was sorted, classified and coded then tabulated for ease of analysis. The data was then summarized and categorized according to common themes. Data collected was analyzed using frequency distribution tables, descriptive statistics and inferential statistics. The SPSS (version 17) computer software aided in the analysis as it was more users friendly and most appropriate for analysis of Management related attitudinal responses. The results suggest that the relationship between process innovation strategy and product differentiation strategy was statistically significant. Process innovation strategy and technology strategy denoted statistical significance. Similarly, the process innovation strategy and innovative customer service strategy posted to be statistical significant. Product differentiation and technology strategy further pointing to be statistical significant. On the same note, the product differentiation strategy and the innovative customer service strategy correlated. This therefore was statistically significant. The technology strategy and innovative customer service strategy correlated and revealed to be statistical significant. The study recommends that for the expected return from investing in residential income property to increase, there should be an improved outlook is associated with a swing in government policy away from public provision of rental housing to the private provision of rental housing. Further research should be carried to establish whether subsidizing small income property investors will provide low-rent housing and hence solve the problem of housing in Nairobi. These findings of the study helped bridge the clearly identified gaps in knowledge and theories that had informed this investigation, relating for instance to the existence or otherwise of differences in cultural orientations on real estate projects, and if the existence of such differences led to significantly different growth outcomes. Such an empirical study of the relationship between organizational culture and real estate growth provided a significant contribution to the body of knowledge on culture in real estate growth.