The effect of innovation strategies on the financial performance of commercial banks in Kenya

Abstract

Current and future challenges and opportunities facing business organizations are in the fields of sustainable development; e-Commerce; and new product development. One way to achieve growth and sustain performance is to foster and encourage creativity and innovative practices internally within the organization. Naturally, there must be a commitment from senior management to facilitate this kind of innovative working environment. This study was aimed at determining the relationship between innovation strategies and financial performance of commercial banks in Kenya. The study was descriptive research design for it portrays an accurate profile of situations. The population of this study consisted of 43 commercial banks in Kenya. The study used a questionnaire to collect the required data. A questionnaire consisted of list of structured questions, un-structured questions and Likert rating scales relating to the field of inquiry with space provided for selection of choices and explanatory answers. The collected data was well examined and checked for completeness and comprehensibility. The data was then summarized, coded and tabulated. Descriptive statistics such as means, standard deviation and frequency distribution were used to analyze the data. The study concludes that firm size affect the rate of future organizational change, and firm profitability to a very great extent. Also the study concludes that most of the banks uses; product improvement, new product introduction, and product replacement to a great extent as product innovation strategies. Further the study concludes that most of the banks uses new products introduction and improved innovation process. In addition, the study concludes that most of the banks use customer satisfaction and retention and availability of resources and capabilities as their marketing innovation strategies