Increasing the Competitive Strengths of Tanzanian Tourism Firms-The Strategic Role of Information Technology

Abstract

This study investigates the relationship between information technology (IT) and firms’ competitive advantage. A conceptual model hypothesizing the relationship between human and IT resources and their influence on firms’ capabilities and competitive advantage is conceived. Market and resource-based views are applied to investigate what differentiates firms’ performance as they deploy IT. Confirmatory factor analysis is used to validate the model and test the hypothesized relationships using 217 cases of SMTEs in Tanzania. The findings demonstrate that IT value depends on both IT and human resources. Industry-specific skills, knowledge and experience and managements’ skills, knowledge and experience of IT determine firms’ performance, not only general business skills, knowledge and experience. Operational effectiveness and strategic positioning also determine competitive advantage but integrity and innovation do not. We add the concept “extended firms’ IT resources and competences”, the vendors, services and expertise that complement IT resources and the competences owned and controlled by firms.