Effect of Innovation on Competitive Advantage of Manufacturing Firms in Rwanda: A Case of Africa’s Improved Food

Competitive advantages are conditions that allow a company or country to produce a good or service of equal value at a lower price or in a more desirable fashion. The objective of this study was to assess the determinants of competitive advantage for manufacturing firms in Rwanda. In this study; a descriptive research was adopted. The target population for this study was 64 senior staff; the researcher adopted a census since the population was quite small in numbers. Primary data was collected using questionnaires. Descriptive and inferential statistics were computed to assess the determinants of competitive advantage for manufacturing firms in Rwanda. Statistical Package for Social Scientists was used to execute multiple linear regressions. According to the results of correlation between innovations and competitive advantage of Africa Improved Foods is at the level of 0.789 meaning that the practice of  making innovations which is measured in terms of  developing new products to new markets, developing  new products to existing markets, spending money in Research and Development and developing new capabilities to compete at the market influence the Return on investment, Market Share and Profitability of Africa Improved Food at the level of 78.9%. Therefore, the study concluded a strong relationship between innovations and competitive advantage of Africa Improved Foods. By considering the level of significance which is 0.05, there is a significant relationship innovations and competitive advantage of Africa Improved Foods as their p-value (0.007) is statistically significant at 5% level of significance.  The study makes the following recommendations. Manufacturing firms in Rwanda; especially Africa Improved Foods Ltd should take the innovative spirit to the high level by increase the efforts in new products development, markets development and increase the more money in Research and Development so as to outperform its competitors.