The Role of Innovation in Building Competitive Advantage in Horticultural Processing and Export Companies in Nairobi Kenya

Abstract

The objective of this project is to determine the role of innovation in building competitive advantage in the horticultural processing and export firms in Kenya. The objective of this paper was to determine the innovation activities adopted by various horticultural firms, assess the role of these activities in augmenting competitive advantage, and identifies the factors that may impede or facilitate innovation. Specifically, surveys assessing t he above factors are given to 49 companies in the horticultural processing and export industry. Competitive advantage is operationalized by a survey question which tracks the percentage of turnover accounted for by innovation in each firm. Multiple linear regression analysis is performed on the relationship between the percentage of turnover accounted for by innovation and innovations in organizational structure, marketing, product development, and process changes. The regression analysis finds that only product and marketing innovations have a statistically significant effect on the percentage turnover accounted for by innovation, with marketing having a negative overall effect. Customer demand play‟s the largest role in the implementation of innovation activities, followed by technological advancement. The fact that customer demand has the strongest relationship on innovation activities is supported by the regression analysis, where we found that product innovation had the strongest role in building competitive advantage