Entrepreneurial Innovation Strategies and Performance of Dairy Micro and Small Enterprises in Nyeri County, Kenya

Abstract

Micro and small enterprises (MSEs) have failed to achieve set objectives of generating sustainable growth and employment. The growth and survival rate of micro and small-sized enterprises (MSEs) in Kenya has been one of the major concerns of the policy makers, practitioners and scholars. The high failure rate among small and medium enterprises businesses in Kenya has created an urgent need to identify strategies that will improve their levels of performance. The strategy and entrepreneurship literature suggests that an entrepreneurial competitive strategy improves firm performance, but empirical results are mixed. This study investigated how entrepreneurial competitive strategies: innovativeness, risk-taking and competitive aggressiveness), affect performance of MSEs in Kenya. In doing so, the study examined the moderating effect of external environment on these relationships. The objectives of the study was to determine: the influence of innovativeness, risk taking propensity, competitive aggressiveness, moderating influence of external environment on performance of micro and small enterprises of Dairy MSEs in Nyeri County. The study used a descriptive survey design. The study was anchored on Resource Based Theory, Diffusion Innovation Theory and Entrepreneurship Theories. The target population will be all the managers/Owners in the 146 Dairy MSEs in Nyeri, County Kenya. The study adopted two sampling designs namely stratified and simple random sampling design. The sample size will comprise of 146 respondents. The study used questionnaires to collect primary data. Pilot test was done to three respondents in three Dairy MSEs to refine the research instruments. Content validity was determined by experts. The reliability of the instrument was tested using Cronbach's Alpha coefficient. A Cronbach's coefficient alpha of .80 or higher was adequate in this study to allow the instrument for data collection. Data analysis was carried out using descriptive statistics. To establish the overall relationship between the independent and dependent variables in the conceptual framework. The study identified and recommended the factors that influence entrepreneurial innovation strategies on performance of dairy micro and small enterprises in Nyeri County, Kenya. These were replicated in areas with similar agro ecological zones facing similar challenges. The study found that entrepreneurship product innovation, process innovation and market innovation had a positive and significant influence on the performance of dairy micro and small enterprises in Nyeri County, Kenya. The study concluded that product innovations helps in developing improved versions of existing products in a market, enhancing the functionality or desire for an item by taking consumer feedback to make improvements or discovering additional features and technology to add. Innovative processes typically describe changes to how a company manufactures a product or performs a transaction, so it can yield better results and profits. The concept of marketing innovation identifies a framework for strategies to make important changes in a product/service, function, price, etc. to achieve higher business objectives such as attracting customers, enhancing image and gaining competitive advantages. The study recommended that the organization should determine its objectives first by being clear with their product goals. Understand its market at all times including its customers and competitors so as to understand what else is going on within its market segment. The organization should adopt new technology to increase efficiency and effectiveness such as automation tools that automates the manual tasks in a given process. The organizations can go for rebranding to match their marketing content to a new product or process the company is selling or using. Retain existing customers to help when selling innovative products.