Abstract
The dynamics of change in the business environments catalysed by globalization, changing consumer preferences, and the whirlwind development of technology have exerted immense pressure on commercial banks to introduce new approaches to enter new markets and exploit existing ones. Market innovation has thus become a vital tool for survival and development. This study examined the influence of market innovation on the competitiveness of Commercial Banks in Kenya. The study was guided by the dynamic capability theory. The study utilized a positivist research philosophy. Descriptive and correlational research designs were used. The target population consisted of 175 directors and general managers of tier-one commercial banks in the following departments based in head office: Research and Development, Marketing and Communication, Customer Service, Credit, and Payments. Banks were classified into tiers through stratified sampling. Managers were classified into directors and general manager levels. Simple random sampling was then employed to select 122 respondents. Primary data was collected using closed and open-ended questionnaires. Reliability was tested by a pilot study done on Equity Bank. To ensure content validity, the research questionnaire was subjected to thorough examination with two university supervisors and two experts from the banking sector. The study adopted the Principal Component Analysis approach to test for construct validity. The study utilized descriptive and inferential analysis. Descriptive analysis included the use of frequencies, percentages, mean and standard deviation while inferential statistics employed correlation and regression analysis. Correlation was done using Pearson’s product moment while regression was conducted using simple linear regression. Data collected from open-ended questionnaires was analyzed using content analysis. Results were presented in the form of tables, graphs, and pie charts. The study findings reveal that market innovation influenced the competitiveness of commercial banks in Kenya. There was a statistically significant relationship between market innovation and competitiveness (r=0.651, p