The Influence of Horizontal Coopetition on the Profitability of Micro and Small Enterprises: The Case of Arusha Handicraft Industry.

Mnzava, Twazihirwa Tunzo (2023) The Influence of Horizontal Coopetition on the Profitability of Micro and Small Enterprises: The Case of Arusha Handicraft Industry. Doctoral thesis, The Open University of Tanzania.

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Abstract

This study aimed at assessing the influence of horizontal coopetition on the profitability of micro and small enterprises in Tanzania using the Theory of Coopetition and Resource Dependence Theory as theoretical frameworks. The specific objectives were to examine the influence of horizontal coopetition in outbound logistics and the duration of coopetition on profitability and the moderation effect of the resource interdependence on the influence of coopetition on profitability. A sample of 159 out of the sample frame of 297 Micro and small enterprises was selected by stratified random sampling method. A survey method was used to collect the data, which were analysed using the moderated multiple linear regression model to test the hypotheses. The results indicated that micro and small enterprises were generally coopetiting in outbound logistics which influenced profitability. The duration of coopetition also had an influence on the profitability. In all cases, the influence was statistically significant notwithstanding the moderation effect of resource interdependence. The results mean that coopetition occurs in customer side of the business cycle to create joint and firm profitability. Within the limit of this study, the resource interdependence had no significant impact on the influence of horizontal coopetition on profitability. Therefore, horizontal coopetition is a strategy and a viable model that can aid firms to improve profitability in the business environment that is dominated by fierce competition from medium and large enterprises. It is recommended that more empirical data from industry-specific cases other than handicrafts be collected and analysed to vindicate the conclusion from this study to add more understanding and knowledge to the coopetition theory. Key words: MSE, horizontal coopetition, outbound logistics, generic advertising, profitability, handicraft

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