I have to apply this strategy! Understanding the mediating effect of digitalization on strategic orientations and sustainable competitive advantage among small enterprises in Tanzania

Abstract

PurposeThe combination of strategic orientation and digitalization for sustainable competitive advantage among small businesses is still not given much attention in the literature. Therefore, this study aims to understand the influence of strategic orientation on sustainable competitive advantage while mediating the relationship with digitalization.Design/methodology/approachThis study used a cross-sectional design. This design helped collect data from 234 small businesses in Arusha city, Tanzania. Since the study used latent variables, structural equation modeling (SEM) was used to analyze relationships and conduct confirmatory factor analysis. Through bootstrapping confidence intervals, Hayes's Process was also used to test how digitalization mediates the relationship between strategic orientations and sustainable competitive advantage.FindingsThe strategic orientation attributes that include market orientation, entrepreneurial orientation and learning orientation were positively and significantly related to digitalization. Furthermore, the results on digitalization and sustainable competitive advantage show a significant positive relationship. Finally, digitalization was analyzed to mediate the relationship between strategic orientation, market orientation, entrepreneurial orientation, learning orientation and sustainable competitive advantage. Hence, all hypotheses were supported.Research limitations/implicationsThis study adopted a cross-sectional design that helped to capture the quantitative information. In addition, the current study is limited to Tanzania's small businesses; thus, the findings cannot assure generalization of the conclusion to other countries because of the differences in social, cultural and technology across countries.Originality/valueThis study integrates the concepts of strategic orientation from the strategic management discipline and digitalization from a technology perspective. As a result, the study adds new knowledge about combining two aspects and determining whether they add value in terms of providing a sustainable competitive advantage. This knowledge comes from digitalization, which acts as a mediator between strategic orientation dimensions and a sustainable competitive advantage.