The Effect of Innovation on Competitive Advantage: A Study on Anbessa Shoes S.C. & Sheba Leather Industry Plc., Ethiopia, 2021

Abstract

Innovation is broadly seen as a crucial component of competitiveness, embedded in the organizational structures, processes, products and market within a firm. The main objective of this paper is to investigate the effect of innovation on competitive advantage in Anbessa Shoes S.C. & Sheba Leather Industry plc, Ethiopia. This study employed mixed approach of research leaning more towards quantitative methods. And stratified random sampling methods were utilized. 198 managers and workers from two companies are source of primary data for this study. Closed ended questionnaires were distributed for 198 managers and workers and 176 were collected from managers and workers of the two industries. In addition, in-depth interview was employed as qualitative data generator of this study. SPSS v26 was used with major tools of analysis such as descriptive and inferential statistical techniques for data analysis. In descriptive statistics, frequencies, percentages, mean scores, standard deviations were used. Moreover, inferential statistics tools Pearson’s correlation and regression analysis were used to assess both relationships between independent variables and effects of innovations on competitive advantage. The findings show that all innovation dimensions: product, process, marketing and organizational innovations have above mid-point Likert scale. Generally, scores in all innovation dimensions were found to be strongly correlated with competitive advantage individually and based on the regression analysis 55.8% of the competitive advantage can be explained by innovation dimensions jointly. Thus, it has been concluded that, innovation has positive significant effect on Anbessa Shoes S.C.’s & Sheba Leather Industry plc.’s competitive advantage. Finally, the researcher