Innovation Strategies, Entrepreneurial Orientation and Performance of Data Service Providers in Kenya

Abstract

Several studies on innovation concepts, consequences and strategies have been published, primarily because innovation is commonly believed to be an integral antecedent of organizational performance. The spectacular growth of the internet, globalization of business and evolution of information economies has resulted in novel digital innovations, business processes and new ways of sharing knowledge. In the recent years, there has been emergence of service firms providing internet data service to consumers in Kenya. The data service industry has been characterized by singular dominance of one to a few firms while others keep losing market share and exiting the market scene. This has been so despite rollout of new spectrum of internet technology that can expand data services to create new revenue-generating opportunities. In this respect, there is emerging consensus that the role of Data Service Providers should transcend mere provision of data services but evolve to create new range of desired products and services. Therefore, the main objective of this study was to assess the effect of innovation strategies on performance of data service providers in Kenya. Specifically, this study sought to examine the effect of process innovation strategies, product innovation strategies, market innovation strategies, technological innovation strategies and to determine moderating effect of entrepreneurial orientation on the relationship between innovation strategies, product innovation strategies, market innovation strategies, technological innovation strategies on the performance of data service providers in Kenya. The study draws from five theoretical frameworks Schumpeter theory of innovation, diffusion of innovation theory, open innovation theory, disruptive innovation theory and Resource based view theory. The study employed a descriptive research design and was guided by positivism philosophy. The study targeted 316 managers of Data Service Providers in Kenya. A representative sample of 177 was obtained by use simple random sampling. Primary data was collected using a structured questionnaire which was pilot tested to ascertain reliability and validity before the actual data collection. Data was analyzed using the statistical package for social sciences (SPSS) version 26.0 where descriptive statistics (percentages, mean, standard deviation) and inferential statistics were used. The findings were presented using figure and tables. The study findings revealed that process innovation strategies, product innovation strategies, market innovation strategies, technological innovation strategies influenced performance of data service providers in Kenya. Additionally, the study concluded that entrepreneurial orientation had a significant moderating effect on the relationship between innovation strategic and performance of data service providers in Kenya. The study concluded that, innovation strategies are integral in stimulating performance of data service providers in Kenya. Moreover, it concluded that through embrace of entrepreneurial orientation, the firms strengthen their ability to be innovative thus enhancing their performance. The study recommends adoption of innovation strategies in the context of listening to customers’ opinion as helping tool in customizing value innovation which can be furthered by altering service products, process and personnel structure to meet customers’ special needs in specific use situations. The study recommends adoption integration of entrepreneurial orientation as a key catalyst to the effectiveness of innovation strategies towards enhancing firm performance. The study findings provide qualitative empirical support for theoretical claims of the effects of innovation strategies on performance of Data Service Providers.