The role of strategic innovation in achieving sustainable competitive advantage in Ethiopian hotels: mediating effects of human capital

Abstract

In the context of Ethiopian hotels, this study investigates the effect of strategic innovation on sustainable competitive advantage, with the mediating role of human capital. The investigators employed both primary and secondary data along with a quantitative research approach. Both descriptive and explanatory research designs were used to examine causal association among the variables. The target population of the present investigation comprised hotels. Non-probability sampling, particularly convenience sampling, was employed. Structural equation modeling, along with exploratory and confirmatory factor analysis, was employed to analyze data. The finding of the study indicated that understanding how these factors interact is essential for enhancing operational effectiveness as well as sustainability as the tourism industry is expanding. With a direct effect of 0.309 and an indirect effect mediated by human capital of 0.230, the results revealed strategic innovation has a significant impact on sustained competitive advantage, with a total effect of 0.540. This suggests that hotels that implement cutting-edge procedures not only set themselves out in a crowded market but also enhance the abilities and involvement of their staff members. Moreover, human capital partially mediates the association between strategic innovation and sustainable competitive advantage. The study highlights how vital it is to fund staff training and development to promote a sustainable culture, which in turn boosts customer happiness and effectiveness of operation. To achieve long-term sustainability as well as competitiveness, hotels should prioritize strategic innovation and human capital development.