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UNIVERSITY OF DAR ES SALAAM BUSINESS SCHOOL (UDBS)

PHD PROPOSAL

MICRO AND SMALL HORTICULTURAL ENTERPRISES‟ MARKET ACCESS TO

TOURIST HOTELS IN TANZANIA: A VALUE CHAIN ANALYSIS

STUDENT: WINNIE NGUNI (E-mail: winnie@udbs.udsm.ac.tz)

UDSM SUPERVISOR: DR. LUFUMBI MWAIPOPO (E-mail: lmwaip@udbs.udsm.ac.tz)

APRIL, 2012

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1.1 INTRODUCTION/BACKGROUND OF THE STUDY

Tourism is an industry that is an important source of income for many countries (Welford,

Ytterhus and Eligh, 1999), but the net foreign exchange earnings from this industry are

considerably less than the gross receipts (Goodwin, 2006). Many less developed countries

(LDCs) now regard tourism as an important and integral part of their economic development

strategies (Dieke, 2003) as it is expected to foster economic growth through foreign exchange

earnings and an increase in state revenue as well as improvement in people‟s well being in

the areas of job creation, revenue or income distribution and balanced regional development.

However, given the active role of the governments to formulate policies for the tourism

sector, substantial leakages resulting from the repatriation of wages and profits, and imports

have caused these so –called Third World destinations to receive only a small return for

exploitation of their natural environment and therefore hinder their efforts towards achieving

sustainable development (Yilmaz and Bititci 2006).

In recent years, tourism has become the largest foreign exchange earner for Tanzania,

exceeding even gold exports, which is the top merchandise export item (UNCTAD, 2008). As

stated by Dieke (2003) that as demand for tourism increases, so it will bring with it

opportunities for linkages with other sectors in the economy. However, despite much success

todate, this industry‟s potential is yet to be fully exploited and the benefits associated with

high linkages of this sector to other sectors of the economy are low (UNCTAD, 2008). For

tourism to have a significant contribution to poverty reduction and overall economic growth,

strengthening its linkage to other sectors especially agriculture, which is the largest

contributor to the national GDP (Amani, 2005), is very important.

Revenue per visitor in Tanzania is reported to be higher but little is retained in the local

economy (Mtui, 2007; and UNCTAD, 2008). The surveys clearly show a high proportion of

imports of goods and services by the tourism sector some of which could be sourced from the

local market in the country. This situation has led to a considerable percentage of tourism

revenues to “leak back” to external service providers/source markets in other countries. In

light of these facts it is logical to argue that, concerted efforts are needed to increase the

value-added of supplies from the local economy to replace or reduce those imports.

The most direct way to reduce the adverse impacts of tourism is to increase opportunities for

local people to engage in appealing tourism activities in their own regions (Akunaay et al,

2003). While sustainable tourism has the positive economic effect of stimulating local

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economic activity, it reduces the flow of foreign currency to developing nations (UNCTAD,

2008) and any resulting economic benefits that may accrue to developing towns and cities

from these revenue flows (Mtui, 2007). The various ways in which local poor people could

benefit from tourism industry include; employment, supply of goods and services to tourism

enterprises, direct sales of goods and services to visitors, among others. For the purpose of

this study, it is thus pertinent to investigate how tourism revenue leakage can be minimized

through supply of goods and services to tourism enterprises by the poor or by the enterprises

employing the poor.

Among the main challenges facing tourism industry in Tanzania is the poor linkages within

local economy. According to Torres (2004), creating local linkages represents the greatest

opportunity to channel tourism industry benefits to the rural poor living on the periphery. It is

from this light that this study agrees with ODI (2009)‟s claim that, to fully optimize tourism

earnings in favour of the local poor people in the country, the time has come where the

destination stakeholders should adopt an integrated approach to link tourism with other

sectors particularly agriculture. By so doing, it is possible to stimulate local economic

activities and widen the chance for local poor people to benefit from tourism industry and

build linkage within it through focusing on strengthening the supply chain of goods and

services for instance fresh fruits and vegetables, from local suppliers such as small scale

farmers, to the tourism stakeholders like tourist hotels so as to respond well to tourists‟ needs

within the country.

Being the agricultural activities, fresh fruits and vegetables growing have the advantage to

link well to tourism sector in Tanzania simply because the number of tourist hotels have been

increasing by over 100 percentage (both local, foreign-owned and joint ventures) between

1996 and 2006 (UNCTAD, 2008) while the growing demand for these products by the

tourists visiting the country, provides powerful financial incentives to local small scale

farmers.

According to (UNCTAD, 2008; UNWTO, 2004) studies, however, there are a lot of

challenges facing tourist hotels within the country in connection with the procurement of

fresh fruits and vegetables from local suppliers. These include poor quality and insufficient

quantity of the supplies; unreliability of the supply; the purchasers are not able to take

advantage of bulk purchasing discounts; irregular deliveries; among others. These challenges

therefore constraint the performance of these products at the local market and hinder

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Tanzania to fully exploit the growth opportunities in demand for these products by the tourist

hotels in the country and eventually will diminish its market share if nothing is being done to

address them.

Given the above mentioned challenges, it can be observed that there is a problem with the

local supply chain of the fresh fruits and vegetables from local suppliers to the tourist hotels,

which hinders the attainment of linkage between horticultural sector and tourism industry. It

is therefore the contention of this study that value chain analysis – which includes the whole

cycle of organization and delivery of products from inception to use and recycling

(Kaplinsky, 2000) - will provide an important framework for addressing this crucial issue.

Following the Kaplinsky, Schimitz and Humphrey (2004)‟s findings that value chain

analysis provides a tool for mapping various ways in which poor producers and poor

countries connect with consumers in the global economy, this study argues that value chain

analysis has a great potential to support sustainable tourism‟s objective of empowering local

poor producers to supply goods and services to tourism enterprises, as it throws more light

on the determinants of sustainable income growth and its equitable distribution (Kaplinsky,

2000). By focusing on all links in the chain and all activities in each link of a value chain, it

becomes easier to distinguish activities subject to raising or decreasing returns, and to

understand the nature and dynamics of innovation (Gereffi and Memedovic, 2003).

As value chain analysis covers a range of interconnected economic activities, spanning

branches and sectors (Gereffi, Humphrey and Sturgeon, 2005), it provides the potential for

coordinating various productive activities that go beyond one particular sector (Taylor, 2005)

and thereby enhancing inter-firm or inter- sector linkage to a greater degree. Therefore this

study will try to apply the knowledge provided by value chain analysis from various scholars‟

research works in analyzing and explaining the determinants that will influence linkage

between tourism and horticulture sectors in Tanzania and therefore reduce tourism revenue

leakage.

Looking at the tourism value chain in Tanzania, as presented in Mtui (2007) and Steck, Wood

and Bishop (2010) studies, the perfect place where local horticultural farmers, particularly for

fresh fruits and vegetables, can greatly benefit is from food and beverage chain. This can be

made possible only when efforts are made to improve local supply chain and support

traditional farming for these products. UNCTAD (2008), UNWTO (2004) and Steck, Wood

and Bishop (2010) surveys have shown that, tourism firms (both local and foreign-owned) are

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willing to source from the local market since it is cheaper for them, but they are constrained

by poor and inconsistency quality, limited varieties and quantity as well as irregularity of

supply of locally produced fresh vegetables and fruits. They argue that, more support is

needed especially in quality improvement, grading and packaging to achieve international

standards for the end-up tourist hotels and for export.

In the light of the above mentioned problem, it is then evident that tourism-food supply chain

for Tanzania is not strong. Most goods for tourism industry are procured abroad with quite

little being bought from the local people (UNCTAD, 2008). It is from this light that this study

argues that, there is a need to find out and analyse the most important factors, using value

chain analysis approach, that will enhance supply chain linkages between tourism businesses

and local suppliers in Tanzania and thereby reducing the leakage of tourism revenue outside

the country. Taylor (2005) postulated that the objective of value chain analysis is to improve

supply chain performance, and to achieve this objective Gereffi, Humphrey and Sturgeon

(2005) suggested that one needs to understand the structure of specific value chain, to

identify the characteristics of its leading firms, and the ways they might wish to incorporate

poor local producers in these value chains.

If the linkage is strengthened, there is good potential for local poor people to be involved in

the production and selling of local exotic fruits and vegetables to the tourism businesses.

Therefore this study agrees with Kaplinsky, Schimitz and Humphrey (2004)‟s claim that

participation in value chain may induce the firm to improve its efficiency in individual

activities, to change the mix of activities (within its link and perhaps to expand into other

links), or to try to innovate by moving into another value chain. Finally it is from the

knowledge gained from value chain analysis that will be applied in this study to explain on

the way the chain should be coordinated (Humprey and Schmitz, 2002) so as to achieve the

intended inter-sector linkage.

1.2 RESEARCH PROBLEM

In order to improve contribution of tourism towards poverty reduction in many third world

tourism destinations, a large number of local small-scale producers need to participate in the

tourism value chain in those countries. As argued by Dieke (2003), MSEs serve useful

functions in tourism industry such as the development of linkage and providing personal

services among others, and this makes MSE sector as the best alternative for the

sustainability and economic development for the developing countries as it allows many rural

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and poor people to participate in tourism (Ubabuko, Kavuwo, Adjei & Shahihuzzaman,

2010). However, various surveys have reported that local horticultural MSEs in some

developing economies face serious challenges supplying their products to the formal tourist

hotels and restaurants for a number of reasons. Most of them life is a daily struggle, with

many of them operating at the margin of survival (Dieke, 2003). They also lack the requisite

to run their businesses along modern technology and management principles (Neupert,

Baughn and Dao, 2006; Sanjaya Lall, 2000). Even the nature of tourism demand renders

them uncompetitive as they are unable to capitalise on the advantages that accrue from the

economies of scale (Mshenga, 2009). Hotels and restaurants do not trust local MSEs as few

experiences they had with them have been negative (Meyer, Ashley and Poultney 2004). In

addition, limited capital and access to credits (Ubabuko, Kavuwo, Adjei & Shahihuzzaman,

2010), weaker support system (Sanjaya Lall, 2000), poor/lack of storage and transport

facilities (Mundim, Alessandro and Stocchetti, 2000) cause a significant barrier for most

SMEs in developing counties to fulfil tourist hotels‟ demand for their products. Due to their

small size and limited resources, these MSEs are not well equipped to tackle these risks

(Herrmann, 2003; Esteves et al, 2010) as it would have been the case with large firms.

The answer to the problems has been identified mainly as building capacities of the MSE

operators and developing proper market strategies. However, there are some few horticultural

MSEs that are able to access sophisticated hotels and restaurants in selling their products

despite the challenges they face. These more successful MSEs have not necessarily received

extraordinarily more training or other support and may present a good opportunity to

understand why linkages are weak between the MSEs sector and formal tourist hotels and

restaurants and the impact such linkages have on the horticultural enterprises. In developing

countries, a number of studies that have looked at the linkages of tourism and other sectors of

the economy have concentrated on identifying opportunities where MSEs can develop market

niche that will assist to access the tourism value chain easily (Mshenga, 2009; Singh 2009),

developing methods and approaches that can effectively identify proper market strategies to

be used by MSEs (Sangiga et al 2004), presenting opportunities, challenges and various types

of linkages tourist hotels can have with local MSEs (Ashley, 2006; Redman, 2009),

promoting smallholders linkage to tourism sector by overcoming a number of constraints

from supply side, demand side and marketing system (Donovan and Poole, 2008; Shepherd,

2007), presenting benefits that tourist hotels can gain by linking with MSEs and policy

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formulation by the government to promote such linkages (Dieke, 2003; Meyer, Ashley and

Poultney, 2004).

Generally there is limited understanding of the horticulture value chain particularly with

regards to its linkage with the tourist hotels. Most of what is documented has been done by

projects whose aim was to inform specific interventions, rather than provide in depth insights

and scientifically explain the workings of and gaps in the tourism-food value chain. It is from

this light that this study aims to raise a question as to why despite the opportunities available

in the market, government intervention through policy formulation to promote MSEs

performance and identified marketing strategies on overcoming the constraints and

penetrating tourist hotels market, only few horticultural MSEs are able to access tourist hotels

and restaurant in course of selling their products given the challenges they face and not

others. In addressing this question, a number of specific questions that are not adequately

addressed in the literature are raised in section 1.2.1.

1.2.1 RESEARCH QUESTIONS

Derived from the main research question presented in section 1.2 above, key research

questions and objectives have been ascertained as follows:

a. How does the value chain for horticulture products function? How does this

functioning compare across sub-sectors, enterprises, operators and locations in terms

of challenges, links and gaps in the chain. What explains these differences? What

effects do the links in the chain generate for the main actors (buyers and sellers?)

b. What kinds of MSEs are able to access sophisticated hotels and restaurants and why

are they able to do so more than others?

c. Are certain types of buyers (hotels and restaurants) more accessible by MSEs than

others? If so what explains the difference in accessibility?

d. Are there any external factors that explain variations in MSEs access to hotels and

restaurants? If so what are these factors

e. How do MSEs that are able to supply to hotels and restaurants differ from those

which are unable to do so in terms of their background and approach to do business

including the way they organise logistics?

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f. What role do other actors in the value chain play in enabling linkages between MSEs

and tourist hotels?

g. How does access to tourist hotels and restaurants affect the capacities and

performance of MSEs?

1.3 RELEVANCE OF THE STUDY

There are many reasons why tourism can be particularly relevant to poverty alleviation,

notably because of its potential in rural areas (WTO, 2004) where three quarters of

Tanzanian‟s poor are to be found (Zoss, 2009). One major reason is that, the tourism sector is

believed to have significant direct and indirect employment effect (UNCTAD, 2008) because

it has potential to support other economic activities especially agriculture, which in turn will

create opportunities for many small and micro entrepreneurs (UNWTO, 2004).

In addition, tourism requires 44% of its inputs from other sectors (UNCTAD, 2008)

agricultural inputs being one of them. In this light, the link between horticultural sector

(which is fast growing and labour intensive (Zoss, 2009)) and tourism, if properly developed

and supported, can accelerate the potential for smallholder farmers‟ participation towards

overcoming economic and social conditions prevailing in the country and allow Tanzania to

competitively participate not only in the local market but also at the international level.

Being the case above, there is a need to assist tourism stakeholders in Tanzania to promote

synergy between tourism and agriculture, with particular reference to horticulture (fresh fruits

and vegetables) which is the main concern of this study. By so doing, the study believes that,

a greater percentage of tourism revenue “leaking back” to other countries will also be reduced

and retained to improve the lives of the poor Tanzanians.

Moreover, this study agrees with Torres (2004) and Laumans (2010) research works that, little

has been written about local linkages as the mechanism in which local tourism providers link

with local suppliers in the economy as a means to get their operational input like labour,

materials and so forth especially in the developing economies in Africa. It is therefore

important for more research to be done in this area so as to find ways for creating more

linkages and promote local sourcing which will eventually lead to sustainable local economic

development. Furthermore, this study will contribute to the existing literature and general

knowledge and be a source of reference for further studies.

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2.0 LITERATURE REVIEW

2.1 TOURISM AND SUSTAINABLE DEVELOPMENT

Tourism can be considered one of the most remarkable socio-economic phenomena of the

twentieth century, as it comprises an extensive range of economic activities and therefore can

be considered the largest industry in the world (Goodwin, 2000; Neto 2003). Argued further

by Neto (2003), tourism is the only major service sector in which developing countries have

consistently recorded trade surpluses relative to the rest of the world and it is now the second

largest source of foreign exchange earnings in these least developed countries. The

development of tourism as a whole is usually accompanied by considerable investments in

infrastructure, such as airports, roads, telecommunication to mention few, from which not

only tourists benefit but also contribute to the improving the living conditions of local

populations.

Tourism sector is an increasingly a significant generator of direct and indirect employment

primarily for unskilled labour, migrants from poor rural areas, people who prefer to work part

time, and notably women (Goodwin, 2000). Because the sector is relatively labour-intensive,

investments in tourism tend to generate a larger and more rapid increase in employment than

equal investment in other economic activities (Jamieson, Goodwin & Edmunds, 2004).

Furthermore, tourism is often identified as the most promising driving force for the economic

development of less developed countries and regions endowed with natural beauty because it

offers them a valuable opportunity for economic diversification (Lansing & De Vries, 2007).

Although Nel & Binns (2002) acknowledge the increasing importance of tourism generally

and more specifically in the developing world to the extent of regarding it as a „passport to

development‟, however , questions concerning the costs and impacts of tourism, and whether

it can truly be an empowering development strategy for the host community to derive

sustainable long-term benefits, must be asked.

In response to the concern above, a term sustainable tourism has surfaced in recent years.

Researchers (Luvanga & Shitundu, 2003; Goodwin, 2006; Quirin, 2010) argue that,

sustainable tourism development should go beyond the promotion of socio-economic

development and give greater priority to poverty reduction. According to Ashley, Goodwin &

Roe (2001), reducing poverty requires pro-poor growth in such a way that rather than aiming

at expanding the size of tourism sector the strategies should aim to unlock opportunities (for

economic gain, other livelihood benefits, or engagement in decision making) for the poor.

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Several reasons as to why tourism can be a particularly effective tool of poverty reduction

have been pinpointed. First, tourism is very large sector, it is growing rapidly and there is

some evidence that it is relatively labour intensive (Jamieson, Goodwin & Edmunds, 2004).

Second, there are considerable linkages with the informal sector, which could generate

positive multiplier effects to poorer groups that rely on that sector for their livelihood (Neto,

2003). Third, tourism tend to be heavily based on upon the preservation of natural capital

such as wildlife and scenery and cultural heritage, which are often „assets that some of the

poor have, even if they have no financial resources‟ (Goodwin, 2008).

In analyzing a wide number of case studies in different developing countries, Meyer, Ashley

& Poultney (2004) and WTO (2004), identified various strategies or ways of addressing

poverty through tourism and these can be applied in almost every country. Among others,

tourism can address poverty through the employment of the poor in tourism enterprises; the

supply of goods and services to tourism enterprises by the poor; the direct sale of goods and

services to visitors by the poor; and supporting the establishment of tourism enterprises by

the poor. These strategies are about creating linkages with a number of stakeholders which

can include local tourism enterprises and small, medium and micro enterprises (SMMEs)

suppliers, community organizations, local residents and neighbors, and local staff.

While sustainable tourism is often proposed as a solution to poverty alleviation, the efficiency

of such a solution is not without challenges when it comes to its implementation. Argued by

Jamieson, Goodwin & Edmunds (2004); Lansing & De Vries (2007); and Mshenga & Owour

(2009), the barriers to effectively using sustainable tourism development as a tool for poverty

reduction include lack of the of the government programs targeted to the tourism informal

sector which plays an essential role in providing tourism services and has the significant

potential of helping to reduce poverty. In addition, the poor are very often have limited access

to tourism infrastructure and assets, and in particular regions and communities they lack

essential market knowledge to allow them to develop pro tourism strategies and products

based on sound market information. Moreover, the poor lack access to credit which is

essential in helping them to participate in the tourism economy and more often the areas with

the highest levels of poverty lack the necessary transportation and communications

infrastructure essential to meeting the needs of the tourism industry.

Suggested by Jamieson, Goodwin & Edmunds (2004), it is clear that for tourism to become

an effective poverty tool there needs to be a paradigm shift in the way that we think about

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tourism and the policies, plans and practices that are used in order to ensure the poor profit

from the tourism development process. In addition, an important consideration in sustainable

initiatives is the involvement of the local residents, guaranteeing that the benefits are shared

on a community-wide basis (Lansing & De Vries, 2007). Consequently part of sustainable

tourism is the ongoing attempt to build tourism properties with local capital, using local

workers and local management. Because one of the main economic concerns with tourism

development is the leakage effect, which prevents the host countries from holding and

retaining the gains from tourism (UNCTAD, 2008), therefore use of local employees and

local suppliers may promote sustainable tourism developments to reduce „leakage‟ effect

(Ashley, 2006), while maximizing the poverty elimination and creating economic

opportunities for the poor (Goodwin, 2008). In the light of this, this study therefore agrees

with the (Mshenga & Owuor, 2009)‟s claim that, there must be recognition that the small-

scale tourism related businesses can have an important impact on poverty reduction and help

create a linkage between tourism and other economic sectors particularly agriculture

(Luvanga & Shitundu, 2003; Ashley, 2006), where majority of the poor depend as a key

source of their livelihood (Rueegg, 2009).

2.1.1 TOURISM AND AGRICULTURAL LINKAGES

Successful broadening and deepening of the local linkages is an integral part of making

tourism work for economic diversification (Rogerson, 2011). More broadly, Ashley,

Goodwin, McNab, Scott & Chaves (2006) claim that, the opening up of opportunities for

emerging entrepreneurs to access corporate supply chains is one of the most useful ways in

which mainstream business can contribute to local development. To emphasize more,

Rogerson (2011) argues that without inter-sectorial collaboration and fomenting sustainable

linkages between tourism demand and other sectors in the destination economy, tourism will

fail as a trigger for local entrepreneurship. Therefore, in order for tourism to contribute to the

local economy, improve rural livelihood and alleviate poverty as contended by Mshenga

(2010), it has to develop linkages with different sectors such as agriculture which is an

important economic source for the poor.

Linking tourism to agriculture can reduce foreign exchange „leakages‟ (Mshenga, 2010). In

addition, building linkages between the two sectors is critical for maximizing tourism‟s

economic impacts in developing countries (Rogerson, 2011). Critically, tourism offers a

potential to stimulate local agricultural development through backward linkages that allow

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local farmers to supply the food needs of tourism establishments (Rueegg, 2009). In view of

that, creating and strengthening back-linkages between the tourism and food production

sectors can, on the other hand, provide a proximate market for locally-produced food and

beverage products, while, on the other hand, enhance visitors‟ experience by providing them

with the opportunity to consume high-quality local produce (Boyne, Williams, & Hall, 2001).

Argued by Trejos & Chiang (2009), as with any other economic activity, the developmental

impact of tourism depend on the nature and interactions of tourism-related activities with

both suppliers (backward linkages) and customers (forward linkages) in the provision of

food, construction outputs, power supplies, transportation and so on. However, in developing

countries there are few links between tourism and local sectors of the economy, in particular

the large informal economy that sustains livelihood in rural and urban areas (Mshenga &

Owuor, 2009; Trejos & Chiang, 2009). Recent scholarship on pro-poor tourism considers

the involvement of small producers in tourism supply chains as part of what is described as

emerging “inclusive business” models which incorporate local communities and the poor

(Rogerson, 2011). Therefore to increase the positive impacts of tourism on poor people,

increase participation of the poor in the tourism industry as well as increase the economic

benefits of the poor from tourism activities, linkages between tourism sector and agricultural

micro and small enterprises (MSEs) has to be promoted (Ashley et al 2006; Rueegg, 2009;

Mshenga & Owuor, 2009).

There are various reasons as to why local agricultural farmers or MSEs in developing

countries should be supplying tourism enterprises with food products. Pointed out by

Rogerson, (2011), supplying formal tourism establishment with food products can build upon

the existing skills of the poor without changing their livelihood strategies. In addition the use

of food products involves utilizing the productive assets of the poor in terms of land and

labor. New skills learned in the production of food for tourism establishments potentially also

might allow farmers to transfer such skills to other food supply chains. Finally, pro-poor

tourism proponents suggest an untapped potential exists for poor people to furnish „authentic‟

locally produced food for which there is a growing demand. Examining the relationship

between tourism and micro and small businesses, Mshenga and Owuor (2009) emphasize

that, it is only through small enterprises that rural people can participate in tourism, because

here is where the opportunities for MSEs or labour by the poor are maximized. Hence,

expanded linkages between agricultural MSEs and tourism can contribute to the “ethos of

sustainable tourism” (Rogerson, 2011).

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Although there is widespread agreement that increased demands from tourism should be met

by local agricultural supplies as asserted by Boyne, Williams, & Hall (2001); Ashley et al

(2006); Ruegg (2009); Mshenga & Owuor (2009); and Mshenga (2010), the empirical part of

achieving these benefits, for the most part, have been less and less. Various critical

constraints preventing local suppliers‟ involvement in tourism supply chains have been

identified. Ashley et al (2006), focusing on the local economy in the Caribbean, reported that

among the challenges observed as far as local sourcing is concerned are; quality, quantity and

reliability of supply are often inadequate; local producers are not sufficiently aware of hotel

requirements and how to much tourist preferences to the required quality; skills are lost as

cheap imports devalue local craftsmanship. Anderson & Juma (2011); Rhiney (2011) and

Rueegg (2009); went further by classifying the challenges into different categories namely

demand-related, supply-related, marketing and intermediary, legal and institutional-related, as

well as government policy factos/challenges. Demand-related include factors such as type of

accommodation with respect to ownership, size and class; tourism industry maturity; health

and safety concerns; training and nationality of chefs among others. Supply-related factors

include physical proximity, quality and quantity of local production, high prices of locally

produced food, undercapitalization of the agrarian market to mention few. Examples of

marketing and intermediary factors are marketing and infrastructure constraints, mistrust,

spatial patterns of supply and lack of information. Government policy factors may include

over-emphasis on tourism and neglect other sectors, unfavorable investment policy and lack

of credit and micro finance support. Legal and institutional challenges include

agreements/contacts kickbacks and weak market links among others.

Based on lack of or low local linkages between tourism and other economic sectors,

particularly agriculture, at the tourism destinations due to the challenges presented above, a

number of recommendations have been pointed out. Provision of the basic business and

entrepreneurship skills through trainings to local suppliers; formation of stronger associations

or networks that will enable local suppliers to pool resources and benefit from the economies

of scale instead of competing between themselves; exchange of the information between the

demand and supply side through meetings and business fora and come up with the agreement

that will guide both of them on the best terms of trade (Anderson & Juma, 2011; Rogerson,

2011; Rueegg, 2009; Trejos & Chiang, 2009; Timms, 2005). Additionally, farmers should

produce for the tourism industry, and to do so they should find out the agricultural products

requirements of the hotels and supply these in the specifications that are required (Mshenga,

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2010). Moreover, any implementation of pro poor strategy must focus on expanding business

opportunities for the poor because small enterprises, particularly in the informal sector, often

provide the greatest opportunities for the poor (Ashley, Roe & Goodwin, 2001). Above all,

the strengthening of linkages between tourism and agriculture in the developing world as a

whole, and in sub-Saharan Africa in particular, remains a research topic of considerable

significance and policy relevance (Rogerson, 2011; Rhiney, 2011).

2.2 VALUE CHAIN ANALYSIS

In order to improve contribution of tourism towards poverty reduction in many third world

tourism destinations, a large number of local small-scale producers need to participate in the

tourism value chain. As postitulated by Yilmaz and Bititci (2006), the high level of

interdependence in tourism industry suggests that various organizations need to work

together as a value chain, to add value and deliver product and/or services to the customer.

For small firms in less developed countries like Tanzania, participation in value chains is a

way to obtain information on the customer‟s need and the mode to gain access to the market

(Giuliani, Pietrobelli and Rabellotti, 2004).

Since the mid-1990s, studies under the global value chain analysis have concentrated their

attention on the governance structures (Brach and Kappel, 2009). Some of the major issues in

the value chain governance literatures are; the role of the lead firms, the issues of power in

the chain and the nature of the relationship among the various actors involved in the chain,

and their implications for development. Claimed by Pietrobelli and Saliola (2006) some

degree of governance or coordination is required in order to take decisions not only on what

should be, or how something should be produced but also when, how much and even at what

price. Coordination may occur through arm‟s-length market relations or non-market

relationships. Humphrey and Schmitz (2000) identified three types of governance or

coordination namely: quasi-hierarchy involving relationships between legally independent

firms in which one is subordinate to the other, with a leader in the chain defining the rules to

which the rest of the actors have to comply; network implying cooperation between firms of

more or less equal power share their competencies within the chain; and hierarchy when the

firm is owned by an external firm.

In supply chain system where a reliable and frequent delivery of products is required there is

an increasing need for assurance about supply performance and thus creating particular needs

for parameter specification. In other words, the value chain here is not only expected to

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supply a physical product, but also range of services associated with it such as consistency,

reliability of delivery and the capacity required. Introduction and enforcement of the

specified parameters require much greater co-ordination of activities and increased

information flows along the chain, thus demanding for value chain governance by the lead

firm. In addition, Pietrobelli and Saliola (2006) pointed out that, efficiency improvements are

expected to be powerfully linked to the governance of the value chain. Prevalence

Dolan and Humphrey (2001) stated that, the governance of the value chain has two parts: the

specification of the structure of the value chain and the systems that ensure the chain‟s actors

meet the required performance standards. As pointed out by Fromm (2007), various forms of

value chain coordination for producers in developing countries imply that they are forced to

compete to be part of the value or supply chain otherwise their participation may be

compromised. Not only that but also they are faced with changes in consumer concerns for

food safety and quality implying that the requirements for standards have increased. All these

changes in market structures and consumer behavior pose challenges for agricultural

producers in most of the developing countries. In other words, Dolan and Humphrey (2002)

claimed that the whole procurement system requires other forms coordination, pressuring

local producers to comply with certain regulations. Competitive pressures require these MSEs

to upgrade, otherwise their participation in the value chains cannot be ensured.

Reasons for value chain governance lie in three factors (Humphrey, 2005; Brach and Kappel,

2009). First, the purchase of non-standard products requires monitoring and enforcement.

When buyers a strategy of product differentiation (i.e. packaging, labeling, varieties,

processes), the need to work directly with suppliers on issues such as product design,

specifications, delivery schedules and handling is increased. Second, failures by suppliers

create risks for buyers and thus, costs increase. In supply system where a reliable and

frequent delivery of products is expected, there is an increasing need for assurances about the

supply performance. Finally, innovation requires simultaneous changes at various points in

the value chain and therefore the possibility of coding information and knowledge to

facilitate economical and efficiency transfers is highly needed. Vertical coordination tends to

increase in agribusiness systems as innovation requires vertical coordination. Because of the

costs associated with vertical coordination, the greater the degree of vertical coordination, the

greater the tendency to rely on a small number of suppliers. However, supplying from only a

number of firms also increases the risk and costs associated with their failure. When a buyer

is sourced from many suppliers with standardized products, the failures of one can be

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compensated by other suppliers. The more that supply chains are concentrated, the more

difficult it is for failures to be offset by other suppliers (Fromm, 2007).

Postulated by Dolan and Humphrey (2002), one notable characteristic of agricultural value

chain is buyer power. Buyer specification of the product design is most likely to arise when

the buyer has a better understanding of the demands of the market than the supplier

(Humphrey and Schmitz, 2000; Wynne, Berthon, Pitt, Ewing and Napoli, 2001). The buyer

then interprets the needs of the market and informs the supplier of what is required.

Moreover, supplier may be confronted with markets that have different quality requirements

and also different and hard to interpret safety quality standards. In this situation, the buyer

may even have basic information about product design. Humphrey and Schmitz (2002); and

Memedovic, (2004), hypothesized the main reason for the specification of the process

parameters by the buyer along the supply chain to the risk. Buyers specify and enforce

parameters when there are potential losses arising from a failure to meet commitments (for

example, delivering the right product on time) or a failure to ensure to ensure that the product

conforms to the necessary standards. These performance risks, relating to factors such as

quality, response time and reliability of delivery, become more important as firms engage in

non-price competition.

According to Gereffi, Humphrey and Sturgeon (2005), value chain framework focuses on the

nature and content of the inter-firm linkages, and the power that regulates value chin

coordination the first few tiers of suppliers. In addition, transaction costs (asset specificity,

frequency and environmental uncertainty), opportunism and coordination costs can be

managed at the inter-firm level and therefore provide reasons why value chain governance

should be given central attention. It is from this light that, literatures based on transaction

cost, resourced based view, power and dependency as well as networking should be reviewed

as part of value chain analysis.

2.2.1 TRANSACTION COST ANALYSIS

Transaction cost analysis (TCA, also referred to as transaction cost economics) is an

approach that explicitly considers the implications of an organization‟s choice to perform a

transaction or activity internally (vertically integrate) or in the market (horizontally integrate

or outsource) (Ellram & Billington, 2001). In transaction cost economics the fundamental

unit of analysis is the transaction (Douma & Schreunder, 2002). Whether a particular

transaction is allocated to the market or to an organization is a matter of cost minimization,

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and Buvik (2001) postulates further that the attributes of the transactions are the critical

determinants in establishing cost efficient governance structures. Moreover, the transaction

cost analysis perspective assumes that the contracting parties are far-sighted and anticipate

potential dependency conditions at the outset. Accordingly, the dependency problem will be

solved ex ante (that is, before you make a deal) through the design of appropriate governance

structures and/or high hazard premiums (Buvik & Reve, 2002). Based on (Ellram &

Billington, 2001)‟s claim, vertically integration represents the failure of the free market to

handle exchange relationships efficiently.

The level of transaction costs according to Douma & Schreunder, (2002); Buvik (2001); and

Ellram & Billington, (2001), depends upon the frequency of the transaction; the level of

transaction specific investments; and the external and internal uncertainty. Defined by Ellram

& Billington, (2001), uncertainty is the inability to predict contingencies that may occur.

Such contingencies may create „opportunism‟, the ability to take advantage of the situation in

order to favorably interpret the contractual terms. External uncertainty deals with the level of

of uncertainty in the market where the organizations operate. Internal uncertainty reflects the

idea that the organization really does not know what it wants, or the situation involving the

transaction is such that the contracting parties have no assurance that the other party has

actually fulfilled it obligation performed. TCA assumes that each uncertainty level creates

potential costs and if they are very high complete vertical integration may be the answer

(Ellram & Billington, 2001).

Asset specificity of a transaction refers to the degree to which the transaction needs to be

supported by transaction-specific assets. An asset is a transaction-specific if it can not be

redeployed to an alternative use without a significant reduction in value of asset specificity

may refer to physical or to human assets (Douma & Schreunder, 2002). Buvik (2002) claims

that TCA predicts that market governance will be cost-effective so long as the level of asset

specificity is modest. When asset specificity remains low, for instance in trade of

standardized products, inter-firm ties are still modest and market governance will set the

frames for deciding terms of trade. According to this researcher, the hybrid mode of

governance will come to play when asset specificity does rise substantially. Under such

circumstances, hybrid governance is warranted for the purpose of enhancing the utility of

specific productive resources. Secondly substantial asset specificity is expected to reinforce

inter-firm dependency and small number conditions and exposure to opportunism. The

researcher argues further that when asset specificity rises substantially, the imposition of

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inter-firm coordination is warranted with a view to handling the trading hazards that small

conditions foster.

However, to set up specialized governance involves certain fixed cost which is more easily

recovered for high frequency transactions (Douma & Schreunder, 2002). When asset

specificity is substantial, the exchange frequency will put the frame for how beneficial

(efficient) specialized governance arrangements will be. As the frequency of exchange

increases, it is easier to realize administrative scale benefits associated to such arrangements

(Buvik & Gronhaug, 2000). Under conditions with substantial order frequency, we expect the

administrative set-up cost of hierarchical governance arrangement to be easier to recover

when substantial asset specificity is present (Buvik 2002).

2.2.2 RESOURCE BASED THEORY

Resource based theory is based on social exchange theory where by organizations are open

system and depend on inputs and output resources to fulfill their goals (Buvik 2001). The

researcher goes further by arguing that, the lack of self-sufficiency with respect to these

resources creates potential dependency on the parties controlling these resources. The lack of

control of the firm‟s flow of the input and output resources will introduce an uncertainty

problem for its decision-making unit (Buvik & Reve, 2002).

A basic premise for the resource based theory is that firms confronted with external

dependency will try to establish inter-organizational arrangements as strategic responses to

conditions of environmental uncertainty and inter-firm dependency (Buvik & Gronhaug,

2002; Buvik, 2001; Heide, 1994). The resource based theory perspective addresses the

importance of the resources exchanged and the parties‟ ability to control the flow of input-

and output resources (Buvik & Gronhaug, 2002). According to these researchers, the resource

base theory perspective follows an effectiveness in that each actor tries to stabilize and

control unpredictable conditions of trade through formal or semiformal links with their

companion trade partner in order to fulfill own goal attainment.

2.2.3 POWER-DEPENDENCY THEORY

Power and dependency are generally considered to be important concepts in understanding

buyer-seller relationship (Caniels and Gelderman, 2007). From this point of view, Maloni and

Benton (2000) postulated that, the significance and expansive effects of power and

dependence on inter-firm relationships hold direct implications for the supply chain. A high

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level of interdependence is an indicator for a strong, cooperative long-term relationship

characterized by mutual trust and mutual commitment (Kumar, Scheer and Steenkamp,

1995). A close and lasting cooperation between supplier and buyer will lead to

improvements in quality, delivery reliability, lead times and cost reduction (Caniels and

Gelderman, 2007). Kumar, Scheer and Steenkamp (1995) and Maloni and Benton (2000),

found empirical evidence that, a strong buyer-seller relationship leads to high performance of

the entire supply chain. This could be in the form of high level of commitment, cooperation,

trust and conflict resolution.

Caniels and Gelderman, (2005), argued that, buyer-seller relationships that are characterised

by asymmetric interdependence lead to unproductive partnerships such that, in the long term

the position of the weaker party will be eroded too much and the partnership will be

destroyed. However, various researchers have proposed several ways in which the

consequences associated with asymmetric interdependence can be mitigated. Diamantopoulos

(1987) believed that, the firm enjoying a power advantage may choose to share control with

the less powerful firm in a more or less equitable manner to foster a democratic relationship.

Heide and John (1992) supported by Joshi (1998) proposed that, for a strong buyer facing a

large number of small suppliers, relational norms can serve as a governance mechanism

against opportunistic behavior especially when transaction-specific assets are involved.

Modifying Emerson (1962)‟s ideas, Kumar, Scheer and Steenkamp (1995), suggested that,

relatively dependent firms should work to increase their partner‟s dependence by increasing

their value to the partners or by reducing the partner‟s alternatives. However, according to

Heide and John (1988), firms in symmetric relationship should not relax; instead they should

continuously take necessary initiatives to maintain that balanced relationship.

Power is the major means available to achieve coordination and cooperation among channel

members (Berthon et al, 2003). Therefore, it is critically important to examine the power and

dependence positions of buyers and sellers (Caniels and Gelderman, 2005) to be able to

establish various favourable supply chain strategies. For the purpose of this study, it is

therefore necessary to assess Power- Dependency relationships between supply chain partners

(horticultural MSEs, intermediaries, tourist hotels) in order to find out how power distribution

in this supply chain influences local linkages issues in Tanzania.

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2.2.4 NETWORKING THEORY AND SMEs PERFORMANCE

Networking became a fashionable topic and since then recognition of value and unique

flexibility of many-faced interorganisational networks has been spreading within business

community with a tremendous speed (Tretyak and Popov, 2009). As firms are experiencing

the need to be simultaneously efficient, flexible, and adaptive, they have turned increasingly

to the network form of organization. Certainly, the information and knowledge-based

economy has accelerated the need to better understand the development of strong and flexible

relationships not only with customers but also with other members of the supply chain

(Terziovski, 2003). As far as the SMEs literature is concerned, an area of research that has

begun to take some prominent since the advent of e-commerce is that of networking where by

the researchers and practitioners have provided invaluable data on the role of networks for

strategic planning, supply chain relationships, the sharing of technical know-how and

increasing the market share of SMEs as reported by MacGregor (2004). O‟Donnell (2004)

described networking in a small firm context as „an activity in which the entrepreneurially

oriented SME owners build and manage personal relationships with particular individuals in

their surroundings‟. However, Valkokari and Helander (2007) defined strategic SME

networks as long-term co-operative agreements whereby more than two partners share critical

knowledge, resources and/or financial assets in order to attain, sustain or improve the firms‟

future competitive positions.

Networks and relationships are important for small firms because they enable these firms to

link activities and tie resources together, to identify new market opportunities and contribute

to building market knowledge (Mort and Weerawardena, 2006). Valkokari and Helander

(2007) claimed that, strategic cooperation and networks are the means that allow SMEs to

compete and innovate in dynamic business environments. In addition Babakus, Yavas and

Haahti, (2006) proposed that, firms employ networking strategies to cope with uncertainty

they perceive in their environment and consequently improve their performance in the

market. Therefore the success of a company depends on its collaboration with other

organizations that influence the creation and delivery of its products or services. For a strong

network linkage and network‟s goal achievement, trust and commitment (Eisingerich and

Bell, 2008; Moeller, 2010; Wincent, 2005), goal congruence between partners (Moeller,

2010), frequent and stable interaction (Eisingerich and Bell, 2008) are some of the important

factors to be taken into the consideration prior to network development.

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Networks play an important role in business due its value creation, in terms of gathering

information and provision of the infrastructure to communicate, purchase, sell products and

services and collaborate with others (De Klerk and Kroon, 2007). Moreover, networks offer

interactive, personal relationships with individual consumers, and offer the opportunity to

discover individual preferences and needs. Therefore the use of the network through the

process of networking offers various benefits. MacGregor (2004) suggested that, networks

are used by SMEs to pool resources and talents together to reap results which would not be

possible (due to cost constraints and economies of scale) if the enterprise operated in

isolation. Terziovski (2003) contended that, network organization allows a company to

concentrate on its distinctive competences, while gathering efficiencies from other firms who

are concentrating their efforts in their areas of expertise. Mort and Weerawardena (2006)

argued that the absence of networks hinders the firms‟ efforts to expand into multiple

markets. Moreover, by integrating into a group and making relation-specific investments,

independent entities can lower cost of transacting with each other (Tretyak and Popov, 2009).

Therefore, networking is a fundamental prerequisite for effective business performance and

the results from Babakus, Yavas and Haahti, (2006)‟s study indicates that, SMEs need to take

decisive steps to forge such contacts so vital for their success.

2.3 EMPERICAL STUDIES

Most of the tourism literatures on local linkages () do acknowledge the persistent existence of

substantial leakages of the tourism revenue to the external providers/markets which is a result

of constant poor linkages tourism sector has with other economic activities particularly

agriculture, in most of the developing countries. Timms (2005), investigated hurdles that

must be overcome if domestic agriculture, in Caribbean particularly St Lucia, is to tap into

the tourist market. The study revealed that promoting linkages between hotels and groups of

farmers such as cooperatives has the greatest potential to stimulate local agricultural

production for hotel and domestic consumption. Ashley et al (2006), provided series of eight

tips on how to develop different types of local linkages, drawing on experience in several

different countries in the Caribbean. The study outlined some of the benefits and the

challenges of the local linkages and the focus on what to do. The briefs provided tips on

good practices mainly for hoteliers and other private, governmental and non-governmental

operators in tourism. Bain (2007), examined whether and how agriculture can be linked to

tourism to enhance the competitiveness of each and how increased benefits from tourism can

redound to the poorer segments of the local population in different Caribbean countries. The

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study found that increased linkage between tourism and agriculture could be enhanced

through the adoption of a cluster-based strategy for improving the competitiveness of the

tourism sector and for improving the livelihoods of communities and rural areas. Mshenga

and Owuor (2009) analysed the proportion of hotel products purchased from MSEs and the

opportunities available to micro and small businesses (MSEs) in the hotel industry in Kenya.

From the analyse, the study found that MSEs have most potential in hotel food supply, child

care services, room cleaning services, garbage collection, handcrafts and souvenir as well as

maintenance and repair services. These results have implications for the role of tourism in

small business growth and improving rural livelihoods and poverty alleviation. Rueegg

(2009) examined the strength of supply chain linkages in th context of the Bolivian Altiplano

and identified obstacles to local sourcing at various levels of the value chains. The study

argued that, the pro-poor impact of tourism-agriculture linkages depends on the ability of

small-scale farmers to participate in high-value agricultural products chains demanded by

hotels and restaurants. The findings from the study revealed the importance of social capital

in overcoming entry barriers and providing market access. Anderson and Juma (2011)

explored challenges facing the linkages between the tourism industry and local suppliers at

the destinations. From this study strategies to bridge the demand-supply gaps in order to

maximize the benefits of tourism, among the tools for fighting the rampant poverty, were

recommended.

The above reviewed studies provide useful basis for this study as they have been able to

identify opportunities and critical challenges faced by various enterprises (both buyers and

sellers) towards exploiting them. In addition, various strategies have been put forward on

how the local enterprises can overcome the constraints and penetrate tourist hotels market.

However this study will go further step to try to provide in depth insights and scientifically

explain the workings of and gaps in the tourism-food value chain. Basing on value chain

analysis, the study will focus on the MSEs (because of their ability to employ majority of

local people) and horticultural sector (because of its growing demand by tourists) and try to

analyse the impact of various tourism-food value chain factors (e.g. power, transaction cost,

resource based) have on these MSEs access to the tourists hotels and restaurants.

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2.4 CONCEPTUAL MODEL

Figure 1: Tentative study model for Value Chain Factors influencing MSEs‟ characteristics

necessary to access Tourists Hotels‟ Market

Source: Developed from the theoretical framework and empirical studies

Based on the literature review, figure 1 above depicts that value chain analysis is necessary to

as it helps to identify value chain factors that influence the characteristics of micro and small

horticultural enterprises necessary to access the buyer‟s (tourist hotels and restaurants)

market. If horticultural MSEs are able to access tourist hotels‟ market to a large extent, then

the output of that linkage is firms‟ growth and increased level of the local employment. This

situation will help to reduce leakage of tourism revenue to a greater percentage.

MSEs Characteristics Response rate (delivery, change in

quality and/or quantity)

Access to reliable information

Trustworthiness /creditworthiness

Capacity (human & non human

resources)

Level of customer service

etc

Value Chain Factors Buyer-seller relationship

Transaction costs

o Asset Specificity

o Uncertainty

environment

o Flexibility

Resources

Networks

Tourists

Hotels‟

Market

Linkage

OUTPUT Firm‟s Growth

Local Employment

Sell

Source

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3.0 METHODOLOGY

3.1 RESEARCH METHODOLOGY

Given the descriptive nature (exploratory and explanatory) of the study, qualitative research

methodology will be used as the main research approach supported by quantitative research

methodology to some extent. The objective of employing qualitative research as the main

research methodology is to obtain a deeper understanding on the issues connected to poor

linkages between tourist hotels and restaurants and horticultural MSEs which will help to

identify the gaps in the horticultural-tourism supply chain (Irby & Lunenburg, 2008). The

approach will involve the use of detailed observation of the natural world and conducting an

intense and/or prolonged contact with the participants. This will assist the researcher to gain a

holistic overview of the context under the study and capture data on the perceptions of actors

from the inside (Lee, Collier and Cullen, 2007). Moreover, qualitative research will assist the

researcher to examine and present the patterns of meanings that will emerge from the data

gathered and contextualize the findings (Amaratunga and Baldry, 2001). To achieve the

objective of the qualitative research, the exploratory study will be conducted to help the

researcher in clarify the understanding of the problem and be able to find out what is

happening, to seek new insights, to ask questions and assess the phenomena in a new light

(Saunders, Lewis and Thornhill, 2009). Search of the literature, interviewing experts in the

field and conducting group interviews are the ways to be employed in conducting this

exploratory study.

3.1.1 RESEARCH STRATEGY

Case study research strategy will form the core of this research study. The main reasons for

case study based research are as follows:

Case study allows direct observation of the field in its natural setting, which would be

particularly suitable for approaching several stages of a supply chain (Seuring, 2008).

This will further allow the researcher to employ multiple method of data collection to

gather information from various entities.

It will allow the researcher to answer “how” and “why” issues in order to understand

the nature and complexity of the processes taking place (Cepede and Martin, 2005;

Perry, 1998) in the horticultural supply chain.

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It will provide rich and thick details in understanding of reality which in turn will

enhance the analysis process in incorporating the views of the actors under the study

(Amaratunga and Baldry, 2001; Grummesson, 2007).

In addition, a well-constructed case study can enable the researcher to challenge an

existing theory and provide a source of new research questions (Saunders, Lewis and

Thornhill, 2009).

More specifically, the study will employed the single case-embedded research design, carried

out by means of interviews and questionnaires using multiple sources of data (Amaratunga

and Baldry, 2001; Weerd-Nederhof, 2001). The rationale for using a single case study

approach is that data collection is carried out across several stages of the horticultural-tourism

supply chain. In addition this study is based on the fact that the researcher is focusing on a

critical case (Saunders, Lewis and Thornhill, 2009; Seuring, 2008) of examining the

existence of constant poor linkage between horticultural MSEs and tourist hotels despite

much effort done by various stakeholders to link the two sectors. Since the research wish to

examine a number of logical sub-units within the horticultural-tourism supply chain and have

more than one unit of analysis, embedded case study is appropriate. Moreover, the use of a

number of sub-units as sources of data in this study is to get more convincing and accurate

findings.

3.1.2 SAMPLE SELECTION AND SAMPLING TECHNIQUES

This study is interested in understanding and analysing the reasons for the persistent poor

linkage between horticultural enterprises and tourist hotels and restaurants despite all the

efforts made by the stakeholders to link the two sectors. Therefore the participants for this

specific study are expected to meet the following criterion:

The enterprises must be micro or small scale sized dealing with the fresh fruits and

vegetable business.

The hotels and restaurants must be serving the foreign tourist.

The intermediaries should be dealing with any activity that links micro and small

horticultural enterprises and tourist hotels and restaurants e.g. transporting the

products between these two nodes, insurance, government agencies, consolidating and

packaging, banking and so on.

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The foreign tourists who are the final consumers of the fresh fruits and vegetables

when visiting Tanzania. This will help the researcher to get some information

concerning their preferences and taste as far as these products are concerned.

To answer the stated research question(s) and meet the research objective as well match the

research strategy, non-probability sampling is the most practical. Non-random sampling

allows the researcher to undertake an in-depth study that focuses on small sample selected for

a particular purpose. This sample is expected to provide the researcher with information-rich

case study in which the researcher explores the research question and gain theoretical

insights. Since qualitative research uses sampling techniques that produce samples that are

small and non-random to obtain in-depth understanding and get the information needed to

achieve the research purpose, participants especially those who meet the specified criterion

will be purposively selected. In view of the fact that the research is striving for in-depth

information where sufficient time is to be spent with the participants(Irby & Lunenburg,

2008), the purposive sample for this study therefore will include 30 micro and small

horticultural enterprises, 20 tourist hotels and restaurants 15 intermediaries and 200 foreign

tourists from different countries.

3.1.3 DATA COLLECTION

A wider range of information will be accessed through the use of primary and secondary data

collection methods. Primary data will be collected from the participants through

administration of questionnaires and interview guides. To enhance the validity and reliability

of these instruments, a pilot study will be conducted prior to the main primary data collection

process. Questionnaires (both structured and semi-structure) will be used to collect data from

tourist hotels‟ procurement department, foreign tourists and main intermediaries dealing with

physical movement of fresh fruits and vegetables from farm level to tourist hotels. The study

believes that these actors have a better level of education, understanding and experience to

assist them in filling the questionnaires.

Interview guides will be used to collect information from horticultural MSEs, Tanzania

Horticultural Association (TAHA) and Government agencies (Tanzania Tourist Board,

Ministry of Agriculture and Food Security, Tanzania Investment Centre, Ministry of National

Resources and Tourism). Since majority of horticultural MSEs are located in rural areas and

operating in small scale, a face-to-face interview through interview guides will be appropriate

as it will enable the researcher to obtain the in-depth detailed information. It is also

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appropriate to use interview guides to collect data from government agencies and TAHA

because the in-depth discussion might involve one member staff who is responsible for

research and development.

Direct observation will also be done through several visits to the farms to observe things like

quality of the main and feeder roads, absence or presence of storage facilities and cooling

systems for the products, size of the farms and how they among others. Visits will also be

paid to the farmers‟ or middlemen‟s consolidation centres and sheds to observe to observe the

handling procedures of the products, presence of storage facilities, condition of the general

environment and so on.

Secondary data will include previous studies and documented sources like scholarly journals,

thesis, books, documents and reports from World Bank, Ministry of Natural Resources and

Tourism, Ministry of Agriculture and Food Security, Bank of Tanzania, Horticultural

Research and Training Institute- Tengeru, World Vegetable Centre, Economic and Social

Research Foundation, United Nations, National Bureau of Statistics, CIA Fact book,

newspapers and other website sources.

3.2 DATA ANALYSIS

Based on the research methodology i.e. qualitative and the research design strategy i.e. case

study, the researcher expects to collect a lot of qualitative data through the use of in-depth

interviews and discussions. Fisher (2010) described that, qualitative data usually consist of

words, audio or visual recording and observation, not numbers. In the light of this, the study

will employ qualitative data analysis and interpretation to bring order and understanding of

the research topic. According to Altinay and Paraskevas, (2008), qualitative data analysis is

the conceptual interpretation of the dataset as a whole, using specific analytic strategies to

convert the raw data into a logical description and explanation of the phenomenon under the

study. As in many instances in qualitative research, the process of data collection and analysis

tend to be simultaneously, with analysis continually informing the process of additional data

collection and new data informing the process of analysis (Irby & Lunenburg, 2008).

Therefore the analysis of data in this study will largely be influenced by the theoretical

perspective of the phenomenon under the study, the research strategy and the researcher‟s

understanding about what data might be relevant and important in answering the research

question.

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Since qualitative studies aim to describe and explain a pattern of relationships and

interactions, the data analysis strategy for this study will be to start with a deductive (theory-

driven) approach to data analysis and then mix it with the inductive (findings-driven)

approach as suggested by Saunders, Lewis and Thornhill (2009). The use of theoretical

framework will help the researcher to organise and direct the data analysis in which the main

variables, components, themes and issues in the research project and the predicted

relationships between them will be identified. The inductive approach will be used to identify

and explore additional issues that may arise from data collection which the research could not

think about and try to see which of them fits in the framework.

The process of qualitative analysis in this study will start with getting to know the data

collected. It is important to know the quality of the data before the beginning of any analysis.

This will be done through reading and re-reading the text and listening to the tape recording

several times and writing down any impressions the researcher has as she goes through the

data as suggested by Altinay and Paraskevas, (2008). Next is to review the purpose of the

evaluation and what the researcher want to find out. This process will help the researcher to

identify a few key questions that she wants the analysis to answer and will also help to decide

how to begin the analysis. To focus the analysis, the respondents‟ answers will be grouped by

case or group (i.e. MSEs, Hotels‟ Procurement Managers, and tourists) and analyse them to

get an overall picture of the research topic. Then the researcher will look at how all

individuals within each group or case responded to each question or topic with open-ended

questions in order to identify consistencies and differences by putting all the data from each

question together. This process will be followed by coding, conceptualisation and ordering

the information by identifying the major themes or patterns and organising them into

coherent categories. In addition, to categorise this narrative data the researcher apply the

iterative approach whereby she will use preset categories or themes from the theoretical

framework and add others as they become apparent as a result of working with the data. Main

categories will be broken into subcategories to allow for greater discrimination and

differences. After the data have been categorised, patterns and connections within and

between categories will be identified. Finally, the interpretation process to bring it all

together where by themes and connections will be used to explain the findings (Saunders,

Lewis and Thornhill (2009); Irby & Lunenburg, (2008); and Fisher (2010)).

According to Altinay and Paraskevas, (2008), manual analysis of qualitative data can be

challenging, especially when the data are recorded on several tapes or digital recorders and

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there are handwritten field notes. It is from this light that, to avoid spending too much time in

reorganising field data into various categories, themes and patterns, the use of a Computer-

Assisted Qualitative Data Analysis Software (CAQDAS) i.e. NVivo shall be employed to

enable the researcher to search, organise, label and annotate textual and visual data collected

for this study.

4.0 RESEARCH TIME FRAME

Activity YEAR 1 YEAR 2 YEAR 3

3 3 3 3 3 3 3 3 3 3 3 3

Proposal

Refinement

Development of data

collection instruments

Pilot study (Testing of the

instruments)

Refinement of data

collection instruments

Field Work (Data collection

phase)

Analysis and thesis writing

First draft report submission

Refinement of the report

draft

Second draft report

submission

Refinement of the report

draft

Third draft report

submission

Revising and editing

Thesis presentation

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REFERENCE LIST

Akunaay, M., Nelson, F., and Singleton, E., 2003, Community based tourism in Tanzania:

Potential and Peril in Practice, A paper presented at the second peace through tourism

conference 7th

-12th

December 2003, held at Golden Tulip Hotel, Dar es Salaam, Tanzania.

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