Effect of Innovation Strategy on Organizational Performance in the Milk Processing Companies in Rwanda: A Case of Inyange

Abstract

Innovation often referred to as creativity of processes, products and services within a firm. This therefore indicates that Inyange industry to be highly competitive in the Rwanda market needs to continuously innovate based on the products that satisfy the market it operates for it to meet its financial performance target and thus fulfill its well indicated mission. This study therefore sought to examine effect of innovation strategy on organizational performance in milk processing companies in Rwanda. Specifically, the study sought to; examine the effect of product, process and market innovation strategy on performance in milk processing companies in Rwanda. The study adopted a descriptive research design. 156 respondents as population, was stratified into three strata: finance managers, production managers, and operational managers. From each stratum the study used the stratified sampling technique to reach to the entire population of the study. Data was collected from both primary and secondary data using questionnaires and documentation. Data collected was analyzed using SPSS version 21. Data analysis involved statistical computations for averages, percentages, and correlation and regression analysis. Ordinary least squares (OLS) regression method of analysis was adopted to determine the inferential statistics. From the above, holding Product Innovation, Process Innovation, Market Innovation to a constant zero, organizational performance would be at 0.347. Unit increase on Product Innovation would lead to increase in organizational performance by a factor of 0.162, unit increase in Process Innovation would lead to increase in financial performance by a factor of 0.282, a unit increase in Market Innovation would lead to increase in organizational performance by a factor of 0.194. This means that product innovation strategy has a great impact on the performance as per the correlation analysis. Also, an improvement in product innovation brought about great performance as per the multiple regression analysis. Thus, as per the regression analysis, market innovation is vital for greater performance. In conclusion, among the strategies, product innovation had more impact and process innovation had less impact on the performance of Inyange industry.