Statistical Modelling – Competitive Advantage versus Strategic Planning

The study continued to examine the extent to which strategic planning correlated with firm competitive advantage. This served to address the main objective of the study. Figure 2 shows a scatter plot of the two variables that suggests a positive linear relationship between firm competitive advantage and strategic planning practices. This means that a firm achieves a higher competitive advantage with a higher level of strategic planning practices.

Based on the scatter plot revelation, a linear regression analysis was carried out to determine the nature of the relationship between a firm’s competitive advantage and strategic planning. The results indicate a positive, moderate linear relationship with a correlation coefficient of r=0.412. The coefficient of determination r2, which measures the goodness of fit was determined as r2 =0.170, which means that 17% of the corresponding change in the firm competitive advantage can be explained by the model;^ — These analyses are shown in Table 2.

a. Predictors: (Constant), Strategic Planning

The study further examined the significance of the overall model I, y± — (see table 3) where y1=competitive advantage, x±= strategic planning, рж= the change in the dependent variable for a unit change in the independent variable, and e is the error term, was examined. The Analysis of Variance (ANOVA) for the significance of the model that x± is significant at 5% level of significance (c: = $.05) the value of p = DJJQ& means that the null hypothesis is rejected. This implies that x±(strategic planning) is significant in explaining y±(competitive advantage) and that the model = pc. is significantly fit at 5% level of significance.

Figure 2

Figure 2. Q-Q plot of competitive advantage

Table 2. Model summary of competitive advantage versus strategic planning

Model R R Square
1 .412a .170

Table 3. ANOVAa of competitive advantage versus strategic planning

Model Sum of squares df Meansquare F Sig.
1 Regression 258.863 1 258.863 48.433 .000b
Residual 1266.698 237 5.345
Total 1525.560 238