The Influence of Horizontal Coopetition in Generic Advertising on the Profitability of Micro and Small Enterprises: A Case of Arusha Handicraft Industry

Abstract

This study in the handicraft industry in Arusha, Tanzania, was done to determine the influence of coopetition in generic advertising on the profitability of Micro and Small Enterprises (MSEs). It employed the theory of coopetition and resource dependence theory as theoretical frameworks. The objective was to investigate the influence of horizontal coopetition in generic advertising on MSEs’ profitability, with MSEs’ resource interdependence moderating the influence. Data collected by survey approach were quantitatively analysed using the moderated multiple linear regression (MLR) model to test the hypotheses. The results demonstrated that coopetition in generic advertising positively and significantly influenced the MSE’s profitability before and after moderation. The resource interdependence had no statistically significant moderating effect on the influence of horizontal coopetition in generic advertising on the MSE profitability. The results mean that coopetition occurs in all business cycle phases to create joint and firm profitability and that horizontal coopetition is a viable business model that can aid MSEs to be profitable and sustainable. More research needs to be done in a rural setting, involving more variables of coopetition in generic advertising and factoring in the MSE attributes as moderators. The study recommends similar studies on coopetition from industry-specific MSEs and in more tourist areas.