IIARD International Institute of Academic Research and Development

Journal of Accounting and Financial Management (JAFM )

E-ISSN 2504-8856
P-ISSN 2695-2211
VOL. 10 NO. 10 2024
DOI: 10.56201/jafm.v10.no10.2024.pg64.87

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Product Innovation and SMEs Performance in Ogun State, Nigeria

Adewunmi Ebenezer ADEKUNLE, & Joshua Adewale ADEJUWON

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Abstract

This study examines the effect of product innovation on the performance of small and medium- sized enterprises (SMEs) in Ogun State, Nigeria, focussing on the roles of new product development, product enhancement, and differentiation strategies on organisational performance. This study addresses a gap in current research by employing the Resource-Based View and Innovation Diffusion Theory to evaluate how these innovative tactics enhance competitive advantage and optimise business results. A descriptive study methodology was employed to survey SMEs in the three senatorial districts of Ogun: Ogun Central, Ogun East, and Ogun West. SMEDAN (2021) reports that Ogun State is home to 31,133 SMEs, representing 4.6% of Nigeria's overall SME population. A sample size of 1,500 SMEs was determined using Krejcie and Morgan’s (1970) table. A pilot study involving 150 SMEs in Ibadan yielded a Cronbach’s alpha of 0.82, confirming the dependability of the research instrument. Data were collected using structured questionnaires and analysed by hierarchical regression. The findings demonstrate that product enhancement (R² = 0.934) and product differentiation strategies (R² = 0.941) exert considerable, statistically significant influences on SME performance, while new product development (R² = 0.008) exhibits a weaker, yet significant, effect. The results indicate that although all types of product innovation enhance SME performance, strategies focused on product enhancement and differentiation are especially impactful. The study suggests that SMEs must prioritise continuous product enhancements and focused differentiation strategies to promote competitiveness and foster long-term success.

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