ABSTRACT
The study
focuses on the effect of product innovation on the performance of selected
Small Scale Enterprises in Aba, Abia State. The main objective of the study is
to examine the effect of product innovation on the performance of selected
Small Scale enterprises. Review of related literature was carried out in
chapter two of the study. In chapter three, a qualitative measure was used in
data collections; different analytical tools were employed in analyzing the
data such as; Pearson Product Moment Correlation, and Multiple regression.
After the results were produced, it was discovered that some factors such as
price, change in product’s colors, restructuring and introduction of new
products were significantly different in the performance of a Small Scale enterprise.
TABLE OF
CONTENTS
Title page i
Declaration ii
Certification iii
Dedication iv
Acknowledgement v
List of tables vi
Table of content vii
Abstract ix
CHAPTER
ONE: INTRODUCTION
1.1 Background
to the Study 1
1.2 Statement
of the Problem 2
1.3 Objective
of the Study 3
1.4 Research
Questions 3
1.5 Research
Hypothesis 3
1.6 Significance
of the Study 4
1.7 Scope of
the Study 4
1.8 Limitation
of the Study 5
CHAPTER TWO:
REVIEW OF RELATED LITERATURE
2.1 Conceptual Framework 6
2.1.1 Innovation 6
2.1.2 Product Innovation 8
2.2 Theoretical Framework 10
2.2.1 Product Innovation Supporting Theories 14
2.2.2 Dynamic Capability Innovation
Theory 14
2.3 Empirical Framework 15
CHAPTER
THREE: RESEARCH METHODOLOGY
3.1 Research
Design 17
3.2 Area of
Study 17
3.3 Sample
Size and Sampling Procedure 17
3.4 Method
of Data Collection 19
3.5 Method
of Data Analysis 19
3.6 Model
Specification 19
3.7 Validity 20
3.8 Reliability 20
CHAPTER FOUR:
PRESENTATION OF DATA
AND ANALYSIS 21
CHAPTER FIVE:
SUMMARY, CONCLUSIONS
AND RECOMMENDATIONS
5.1 Summary of Findings 32
5.2 Conclusion 33
5.3 Recommendation 33
References 35
Appendix 1 39
LIST OF
TABLES
4.1.0 Age of the Business 21
Table 4.1.0 Distribution of the Age of the Business 21
4.1.1 Business Size 22
Table 4.1.1 Size Distribution of the Firm 22
4.1.2 Size of Labour 22
Table 4.1.2 distribution of data on the size of the firm 23
4.1.3 Changes in Products 24
Table 4.1.3 Distribution of Data in the Change on Products 24
4.1.4 Sales Volume 25
Table 4.1.3 Sales Distribution of the Respondents 25
4.1.5 Profit Level 26
Table 4.1.5 Profit Distribution levels of the Respondents 26
4.1.6 Value
of Shares 27
Table
4.1.6 Value Distribution of the
Respondents Shares 27
4.2.0 Effect of Product Innovations on Sales 27
Table 4.2.1 Correlation 27
Table 4.3.0 Factors Determining the
Impact of Innovations on the 29
Performance of a Firm.
CHAPTER
ONE
INTRODUCTION
1.1
Background
of the study
Product innovation according to Gunday, (2011) is
broadly seen as an essential component of competitiveness, embedded in the
organizational structure, processes, products, operations, and services within
the firm. Product innovation is one of the fundamental instruments of growth
strategies to enter new markets, to increase the existing market share and to
provide the company with a competitive edge. However, developed and developing
economies around the world have come to realize the value of small and
medium-scale businesses. They are seen to be characterized by dynamism,
innovations, efficiency, competition, technological development, and their
small size allows for faster decision-making process. government all over the
world have realized the importance of these categories of companies and have
formulated comprehensive public policies to encourage, support, and fund the
establishment of small scale enterprise. Development of small and medium scale
enterprises is sin-quo-non for employment generation, encouraging the use of
local resources, feeding service industries, potential for rapid
industrialization, value added production, and contributing to gross domestic
product. But with the dynamism of the environment and changes in consumption
pattern, the small and medium enterprises innovating in
products has been a challenge; hence their survival is not guaranteed.
Some small scale enterprise, do not invest so many
resources on the utilization of modern technologies, as this makes for the
decline in the designing and development of new products. This might not be
appropriate for present and future circumstances, which could make the
organizations to fade away with time. Small scale enterprise cannot only rely
on her past success of established products, and lose sight of market realities
of changes in taste and preference of consumers, which are fundamental
requirements for achieving competitive advantages: as sooner or later, this
leads to failure. Small sizes of small scale enterprises and lack of healthy
competition in the sector leads to decline in sales volume and inability to
achieve their marketing and corporate goals, yet they find it difficult, if not
impossible, to survive.
1.2
Statement
of the Problem
Small scale enterprise is critical to the development
of any economy as they usually form the bulk of economic activity (Kayanula and
Quartey, 2000) especially in the developing world. Most of these small scale
enterprises do not survive their second “birthday” because of certain
constraints. These constraints includes; lack of capital, human resource challenges,
market-based challenges, unfavorable legal, regulatory conditions and weak
institutional regimes (Abor Quartey, 2010). Innovation is one of the key means
by which Small scale enterprise can overcome these harsh business conditions to
survive and grow into large corporate entities.
Academics have studied the various innovations that can
be adopted by small scale enterprise. Few studies have looked at organizational
innovation among small scale enterprises with the exception of Salavou, (2004)
who looked at organizational innovation in small scale enterprise form the
context of strategic orientation and competitive structure in Greek Small scale
enterprise.
This study will consider the spread of organizational
innovation among rural small scale enterprise.
1.3 Objectives of the Study
The main objective of the study is to determine the
effect of product innovation on the performance of selected small scale enterprise
in Abia state; the specific objectives are to;
i.
examine the relationship
between product innovation and sales growth.
ii.
ascertain the effects of
innovation on the taste and preference for consumers.
iii.
analyze the effect of
innovation on increase in profitability in a small scale enterprise.
1.4 Research
Questions
The following research questions were stated to guide
the study. They are stated below;
i.
what is the relationship
between product innovation and sales growth?
ii.
what is the effect of
innovation on the preference of consumers?
iii.
what is the effect of
innovation on increase in profitability in a small scale enterprise?
1.5 Research
Hypotheses
i.
Ho1:
there is no significant relationship between product innovation and sales
growth.
ii.
Ho2:
there is no significant effect of innovation on increase in profitability in a
small scale enterprise.
1.6 Significance
of the Study
The relevance of this study, this time, is a crucial
as the study will help to highlight the importance and benefits of product
innovation to small scale enterprise and companies. The information collected,
will expose the management of the companies in product innovation, and know the
quantity to produce in order to avoid losses. The study also helps in the following
dimensions;
·
it helps the firms in the
industry to compete favorably,
·
moreover, consumers stand
to gain immensely from the study, given the fact that it will make them to make
rational choices,
·
for the society at large,
the study will unveil product innovations which will further aid growth of
small enterprise and explore it for better revenue generation,
·
the study will help the
diary sector to appreciate the problems and prospects associated in the
production of dairy products,
·
Central Bank of Nigeria
and Nigeria Financial institutions will also benefit from this study, in a bid
to restore both foreign and entrepreneurs, distributors and suppliers
confidence in profitability.
1.7 Scope
of the Study
The study will be limited to the innovation strategies
of selected small scale enterprise in Aba. This group where chosen so that data
collection will be easier for analysis purposes.
1.8 Limitations of the Study
The study is limited in scope because it did not cover all
the Small Scale enterprises in Abia State. Also the researcher was constrained
by time and resources. This is because the study was not sponsored and that the
researcher who was a student was to meet a narrow deadline for the submission
of the study report. Also, the data obtained from the respondents.
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