Innovativeness and Competitive Advantage of Small and Medium Enterprise in Kogi State
Keywords:Competitive Advantage, Value Capture Innovation, Value Proposition Innovation, New Cost Structures, New Revenue Models, New Customer Relationships
The study focused on the nexus between innovation and the competitive advantage of SMEs
in Kogi State. The study examined the effect of value capture innovation and value proposition
innovation on the competitive advantage of SMEs in Kogi State. The survey research design was
adopted. For this study, multi-stage random sampling technique was adopted. The sample size of the
study was 255 SMEs. The researcher used primary source of data. Data were collected through
questionnaire. Cronbach's reliability test showed that value capture innovation has 0.917; and value
proposition innovation has 0.776. All data collected were presented and analyzed using frequency
distribution table. Multiple Regression analysis was used for testing hypotheses. Finding showed that
value capture innovation and value proposition innovation have substantial effect on the competitive
advantage of SMEs in Kogi State. The study concluded that SMEs need to possess innovation
capabilities so as to enhance reasonable position in the competitive business environment. The study
recommended that SME owners should increase their commitment to value capture innovation so as
to achieve sustainable competitive advantage for their enterprises, and that SME owners should
invest in value proposition innovation to create effective medium route towards the achievement of
sustainable competitive advantage of their enterprises.
Adam, N. A., & Alarifi, G. (2021). Innovation practices for survival of small and medium enterprises
(SMEs) in the COVID-19 times: the role of external support. Journal of Innovation and
Entrepreneurship, 10(1). doi:10.1186/s13731-021-00156-6
Adrodegari, F., & Saccani, N. (2017). Business models for the service transformation of industrial
firms. The Service Industries Journal, 37(1),
Ajayi, O. M., & Morton, S. C. (2015). Exploring the Enablers of Organizational and Marketing
Innovations in SMEs. SAGE Open, 5(1), 1-13. https://doi.org/10.1177/2158244015571487
Anwar, M. (2018). Business Model Innovation And Smes Performance — Does Competitive
Advantage Mediate? International Journal of Innovation Management,
Aziz, N. N. A., & Samad, S. (2016). Innovation and Competitive Advantage: Moderating Effects of
Firm Age in Foods Manufacturing SMEs in Malaysia. Procedia Economics and Finance, 35,
Baita, A.J. & Adhama, H.D. (2020). Innovation and SMEs Performance in Nigeria: A Proposed
Framework. International Journal of Scientific Research in Science and Technology, 7(6), 396-
Boachie-Mensah, F.B. and Acquah, I.S. (2015). The Effect of Innovation Types on the Performance
of Small and Medium Sized Enterprises in the Sekondi-Takoradi Metropolis. Archives of
Business Research, 3(3), 77-98.
Chen, J., Liu, L., & Wang, Y. (2020). Business model innovation and growth of manufacturing
SMEs: a social exchange perspective. Journal of Manufacturing Technology Management,
(2), 290–312. doi:10.1108/jmtm-03-2020-0089
Chesbrough, H., Lettl, C. & Ritter, T. (2018). Value creation and value capture in open innovation.
Journal of Product Innovation Management, 35(6), 930–38.
Chesbrough, H., Lettl, C., & Ritter, T. (2018). Value creation and Value Capture in Open Innovation.
Journal of Product Innovation Management, 1-23. https://doi.org/10.1111/jpim.12471
Clauss, T. (2016). Measuring business model innovation: conceptualization, scale development, and
proof of performance. R&D Management, 47(3), 385–403. https://doi.org/10.1111/radm.12186
Distanont, A., & Khongmalai, O. (2020). The role of innovation in creating a competitive advantage.
Kasetsart Journal of Social Sciences, 41, 15–21. https://doi.org/10.1016/j.kjss.2018.07.009
Eggert, A., Ulaga, W., Frow, P., & Payne, A. (2018). Conceptualizing and communicating value in
business markets: From value in exchange to value in use. Industrial Marketing Management,
, 80–90. doi:10.1016/j.indmarman.2018.01.018
Ferreira, J., Coelho, A., & Moutinho, L. (2018). Dynamic capabilities, creativity and innovation
capability and their impact on competitive advantage and firm performance: The moderating
role of entrepreneurial orientation. Technovation, 1-
Foss, N. J., & Saebi, T. (2016). Fifteen Years of Research on Business Model Innovation. Journal of
Management, 43(1), 200–227. https://doi.org/10.1177/0149206316675927
Hervás-Oliver, J.-L., Parrilli, M. D., Rodríguez-Pose, A., & Sempere-Ripoll, F. (2021). The drivers of
SME innovation in the regions of the EU. Research Policy, 50(9),
Howell, R., van Beers, C., & Doorn, N. (2018). Value capture and value creation: The role of
information technology in business models for frugal innovations in Africa. Technological
Forecasting and Social Change, 131, 227–239. https://doi.org/10.1016/j.techfore.2017.09.030
Jeje, K. (2022). Innovation and Performance of Small and Medium-sized Bakeries in Tanzania. Acta
Universitatis Danubius: Œconomica, 18(2), 126-158.
Kahn, K. B. (2018). Understanding innovation. Business Horizons, 61(3), 453-460.
Kuswantoro, F., Rosli, M.M., Abdul, R., & Ghorbani, H. (2012). Impact of Distribution Channel
Innovation on the Performance of Small and Medium Enterprises. International Business and
Management, 5(1), 52-61. http://dx.doi.org/10.3968/j.ibm.1923842820120501.1025
Lazonick, W. ( 2013). The Theory of the Market Economy and the Social Foundations of Innovative
Enterprise. Economic and Industrial Democracy, 24(1), 9-44.
Lazonick, W. (2005). The Innovative Firm, In J. Fagerberg, D. Mowery, and R. Nelson (eds.). The
Oxford Handbook of Innovation, Oxford University Press: 29- 55.
Lazonick, W. and O'Sullivan, M. (2000). Perspectives on Corporate Governance, Innovation and
Economic Performance. Report to the European Commission (DGXII) under the TSER
Programme, June 2000.
Marques, C.S. & Ferreira, J. (2009). SME Innovative Capacity, Competitive Advantage and
Performance in a ‘Traditional’ Industrial Region of Portugal. Journal of Technology
Management and Innovation, 4(4), 53-68.
Martínez-Román, J.A., & Romero, I. (2017). Determinants of innovativeness in SMEs: disentangling
core innovation and technology adoption capabilities. Review of Managerial Science
(forthcoming), 1-32. https://doi.org/10.1007/s11846-016-0196-x
Mulibana, L. & Rena, R. (2021). Establishing a Creative Innovation Framework for informal Micro-
Enterprises. Acta Universitatis Danubius: Œconomica, 7(2), 104-123
Nafiu, A.T., Uba, H. & Egwu, E.M. (2020). Innovations, Competitive Advantage and Performance of
Small and Medium-Size Enterprises in Kogi State: An Empirical Investigation. International
Journal of Advanced Research, 8(04), 23-31. https://doi.org/10.5281/zenodo.3823994
Nafula, K.M. (2017). Effect of Innovation on Firm Competitiveness: A Study of Small and Medium
Enterprises in the Manufacturing Sector in Nairobi City County, Kenya. A Thesis: Kenyatta
Ndesaulwa, A.P. & Kikula, J. (2016). The Impact of Innovation on Performance of Small and
Medium Enterprises (SMEs) in Tanzania: A Review of Empirical Evidence. Journal of Business
and Management Sciences, 4(1), 1-6. https://doi.org/10.12691/jbms-4-1-1 .
Onileowo, T. T., Muharam, F. M., Ramily, M. K. & Khatib, S.F.A. (2021). The Nexus between
Innovation and Business Competitive Advantage: A Conceptual Study. Universal Journal of
Accounting and Finance, 9(3), 352 - 361. https://doi.org/10.13189/ujaf.2021.090309
Porter, M. (1980). Competitive Strategy. Free Press, New York.
Porter, M. E. (1990). The Competitive Advantage of Nations. New York: Free Press, MacMillan.
Raddats, C., Kowalkowski, C., Benedettini, O., Burton, J., & Gebauer, H. (2019). Servitization: A
contemporary thematic review of four major research streams. Industrial Marketing
Management, 83, 207–23. https://doi.org/10.1016/j.indmarman.2019.03.015
Raymond, L. & St-Pierre, J. (2010). R&D as a determinant of innovation in manufacturing SMEs: An
attempt at empirical clarification. Technovation, 30(1), 48-56.
Schumpeter J.A. (1954). History of Economic Analysis, Edited from manuscript by E.B Schumpeter,
London: Allen & Unwin
Schumpeter, J. (1939). Business cycles: A theoretical, Historical and Statistical Analysis of the
capitalist process, Vol.2, New York: Mc Graw-Hill.
Schumpeter, J.A. (1934). The Theory of Economic development: an inquiry into profits, capital,
credit, interest and the business cycle, Cambridge mass: Harvard University press.
Sjödin, D., Parida, V., Jovanovic, M., & Visnjic, I. (2019). Value creation and value capture
alignment in business model innovation: A process view on outcome‐based business models.
Journal of Product Innovation Management, 37(2), 158-183. https://doi.org/10.1111/jpim.12516
Soltani, Z., & Navimipour, N. J. (2016). Customer relationship management mechanisms: A
systematic review of the state of the art literature and recommendations for future research.
Computers in Human Behavior, 61, 667–688. doi:10.1016/j.chb.2016.03.008
Terho, H., Haas, A., Eggert, A., & Ulaga, W. (2012). It's almost like taking the sales out of
selling’—Towards a conceptualization of value-based selling in business markets. Industrial
Marketing Management, 41(1), 174-185.
Ukpabio, M.G., Oyebisi, T.O. and Siyanbola, O.W. (2018). Effects of Innovation on Performance of
Manufacturing SMEs in Nigeria: An empirical study. Retrieved on 21/09/2019 from
Zikmund, W.G., Babin, J., Carr. J.C & Griffin, M. (2010). Business Research Methods. 8 th Ed. South-
Western: Cengage Learning
Copyright (c) 2022 Nurudeen Yakubu Zakariya
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
The author fully assumes the content originality and the holograph signature makes him responsible in case of trial.