Coping with institutional constraints with evidence from micro enterprises in Tanzania : What strategies taxi entrepreneurs use to increase sales in Moshi

Sammanfattning: The emerging countries experience constraints for economic development and the institutional environment often appear burdensome for micro- and small enterprises (MSE). A favourable institutional environment reduces transaction costs, creates incentives for development and sustainability of enterprises. This paper studies the taxi industry in Moshi, Tanzania. Taxi driver A, Y and R are the focus in the study, and all use differentiating strategies due to institutional constraints affecting MSE’s. In terms of the taxi industry in Moshi, tinged with uncertainty and weak institutional framework it becomes difficult for operators to differentiate themselves, which is why well thought-out marketing strategies becomes important in a competitive industry. Institutional theory with focus on transaction costs and service management are two theoretical disciplines, which together with an entrepreneurial theory creates an interesting combination and acts as the fundamental building blocks in this study. This study’s research questions are what differentiation strategies could help MSE’s and what strategies lower transaction costs for increased profit in developing countries. This study’s objective is to understand how Taxi drivers in Moshi will benefit from a combination of transaction costs, service and relationship marketing and an entrepreneurial mindset to create a comprehensive marketing strategy for how success and profit with their business is created in terms of increased customer base, higher customer satisfaction and stronger customer relationships. This study’s objective is not to identify, explain and analyse what exact institutional constraints are present in Moshi as that is a very complex area of research. This study is characterized by a triangulation methodology involving a combination of depth interviews, observations and a questionnaire survey. The authors have conducted an exploratory study aiming to create a deeper understanding of the taxi business’ social context. A combination of the both induction and deduction approach was used; analytic induction; when inductive empirical results is combined with deduced theories to get deeper understanding. The results of this study provide implications for the overall differentiating strategies for taxi drivers in Moshi. The results implicates that efficient work to lower transaction costs, asymmetric information and relationship building increases opportunities for taxi drivers to ensure sustainable profit. INget man gör medvetet uten ett beteende som uppstår som en konsekvens av dåliga institutioner The study concludes with general recommendations and suggestions for future research.