THE ROLE OF COMPETITIVE ADVANTAGE MEDIATION IN THE RELATIONSHIP OF ENTREPRENEURSHIP ORIENTATION, BUSINESS STRATEGY, AND BUSINESS PERFORMANCE IN INDONESIAN STREET FOOD SME

Lila Bismala, Susi Handayani

Abstract


This study aimed to investigate the mediating role of competitive advantage in the relationship between entrepreneurial orientation, business strategy, and business performance in Indonesian street food SMEs in North Sumatra. A total of 384 questionnaires were used for analysis using regression analysis, IBM SPSS Statistics 24, path analysis for hypotheses testing. The results show that competitive advantage acts as a mediating variable in the relationship between entrepreneurial orientation and business performance. However, a competitive advantage does not mediate the relationship between business strategy and performance. Competitive advantage is an important thing that SMEs must own, which cannot be imitated by competitors, given the increasingly fierce level of competition. SMEs must have an entrepreneurial orientation and have the ability to formulate business strategies. This study contributes to building a theory of the importance of competitive advantage for SMEs, which can affect SME business performance. Competitive advantage is influenced by entrepreneurial orientation and business strategy and the ability to plan and implement business strategies so that they can survive in the competition.

Full Text:

PDF

References


Acquaah, M., & Agyapong, A. (2015). The Relationship between Competitive Strategy and Firm Performance in Micro and Small Businesses in Ghana: The Moderating Role of Managerial and Marketing Capabilities. Africa Journal of Management, 1(2), 172–193. https://doi.org/10.1080/23322373.2015.1025684

Agyapong, A., Ellis, F., & Domeher, D. (2016). Competitive strategy and performance of family businesses: moderating effect of managerial and innovative capabilities. Journal of Small Business and Entrepreneurship, 28(6), 449–477. https://doi.org/10.1080/08276331.2016.1217727

Ajayi, B. (2016). The Impact of Entrepreneurial Orientation and Networking Capabilities on the Export Performance of Nigerian Agricultural SMEs. Journal of Entrepreneurship and Innovation in Emerging Economies, 2(1), 1–23. https://doi.org/10.1177/2393957515619720

Al Badi, K. S. (2018). The Impact of Marketing Mix on the Competitive Advantage of the SME Sector in the Al Buraimi Governorate in Oman. SAGE Open, 8(3), 1–10. https://doi.org/10.1177/2158244018800838

Alvarez-Torres, F. J., Lopez-Torres, G. C., & Schiuma, G. (2019). Linking entrepreneurial orientation to SMEs’ performance: Implications for entrepreneurship universities. Management Decision, 57(12), 3364–3386. https://doi.org/10.1108/MD-11-2018-1234

Avlonitis, G. J., & Salavou, H. E. (2007). Entrepreneurial orientation of SMEs, product innovativeness, and performance. Journal of Business Research, 60, 566–575. https://doi.org/10.1016/j.jbusres.2007.01.001

Bennett, R. J., & Smith, C. (2002). Competitive conditions, competitive advantage and the location of SMEs. Journal of Small Business and Enterprise Development, 9(1), 73–86. https://doi.org/10.1108/14626000210419509

Bismala, L., & Handayani, S. (2017). Core Competency Factors And SME’s Competitive Strategy. International Journal of Recent Scientific Research, 8(9), 20257–20261. https://doi.org/10.24327/IJRSR

Boohene, R., Sheridan, A., & Kotey, B. (2008). Gender, personal values, strategies and small business performance: A Ghanaian case study. Equal Opportunities International, 27(3), 237–257. https://doi.org/10.1108/02610150810860075

Craig, J. B. L., & Moores, K. (2005). Balanced Scorecards to drive the strategic planning of family firms. Family Business Review, 18(2), 105–122. https://doi.org/10.1111/j.1741-6248.2005.00035.x

Day, G. S., & Wensley, R. (1988). Assessing Advantage: A Framework for Diagnosing Competitive Superiority. Journal of Marketing, 52(2), 1–20. https://doi.org/10.2307/1251454

Donkor, J., Donkor, G. N. A., & Kwarteng, C. K. (2018). Strategic planning and performance of SMEs in Ghana. Asia Pacific Journal of Innovation and Entrepreneurship, 12(1), 62–76. https://doi.org/10.1108/apjie-10-2017-0035

Efendi, S., Sugiono, E., Guritno, E., Sufyati, E., & Hendryadi, E. (2020). Building innovation and competitiveness for low technology manufacturing SMEs through imitating capability and learning: The case of Indonesia. Cogent Social Sciences, 6(1). https://doi.org/10.1080/23311886.2020.1803515

Erista, I. F. S., Andadari, R. K., Usmanij, P. A., & Ratten, V. (2020). The Influence of Entrepreneurship Orientation on Firm Performance: A Case Study of the Salatiga Food Industry, Indonesia. In Entrepreneurship as Empowerment: Knowledge Spillovers and Entrepreneurial Ecosystems (pp. 45–61). https://doi.org/10.1108/978-1-83982-550-720201005

Hernández-Perlines, F., & Rung-Hoch, N. (2017). Sustainable entrepreneurial orientation in family firms. Sustainability (Switzerland), 9(7), 1–16. https://doi.org/10.3390/su9071212

Ho, T. C. F., Ahmad, N. H., & Ramayah, T. (2016). Competitive Capabilities and Business Performance among Manufacturing SMEs: Evidence from an Emerging Economy, Malaysia. Journal of Asia-Pacific Business, 17(1), 37–58. https://doi.org/10.1080/10599231.2016.1129263

Hutahayan, B. (2019). Factors affecting the performance of Indonesian special food SMEs in entrepreneurial orientation in East Java. Asia Pacific Journal of Innovation and Entrepreneurship, 13(2), 231–246. https://doi.org/10.1108/apjie-09-2018-0053

Hwang, W. S., Choi, H., & Shin, J. (2020). A mediating role of innovation capability between entrepreneurial competencies and competitive advantage. Technology Analysis and Strategic Management, 32(1), 1–14. https://doi.org/10.1080/09537325.2019.1632430

Ismail, A. I., Majid, A. H. A., Rahman, M. A., Jamaluddin, N. A., Susantiy, A. I., & Setiawati, C. I. (2021). Aligning Malaysian SMEs with the Megatrends: The Roles of HPWPs and Employee Creativity in Enhancing Malaysian SME Performance. Global Business Review, 22(2), 364–380. https://doi.org/10.1177/0972150918811236

Jusoh, R., & Parnell, J. A. (2008). Competitive strategy and performance measurement in the Malaysian context: An exploratory study. Management Decision, 46(1), 5–31. https://doi.org/10.1108/00251740810846716

Khan, H. U. Z., Ahmed, R., & Halabi, A. K. (2010). The roles of degree of competition and types of business strategies in adopting multiple performance measurement practices: Some reflections from bangladesh. In Research in Accounting in Emerging Economies (Vol. 10, pp. 201–232). Elsevier. https://doi.org/10.1108/S1479-3563(2010)0000010013

Latifah, L., Setiawan, D., Aryani, Y. A., & Rahmawati, R. (2021). Business strategy – MSMEs’ performance relationship: innovation and accounting information system as mediators. Journal of Small Business and Enterprise Development, 28(1), 1–21. https://doi.org/10.1108/JSBED-04-2019-0116

Lechner, C., & Gudmundsson, S. V. (2012). Entrepreneurial orientation, firm strategy and small firm performance. International Small Business Journal, 32(1), 36–60. https://doi.org/10.1177/0266242612455034

Lee, J.-S., & Hsieh, C.-J. (2010). A Research In Relating Entrepreneurship, Marketing Capability, Innovative Capability And Sustained Competitive Advantage. Journal of Business & Economics Research (JBER), 8(9), 109–120. https://doi.org/10.19030/jber.v8i9.763

Leković, B., & Marić, S. (2015). Measures of small business success / performance – importance , reliability and usability. Industrija, 43(2), 7–26. https://doi.org/10.5937/industrija43-7209

Liao, Y. S. (2005). Business strategy and performance: The role of human resource management control. Personnel Review, 34(3), 294–309. https://doi.org/10.1108/00483480510591444

Lumpkin, G. T., & Dess, G. G. (1996). Clarifying the Entrepreneurial Orientation Construct and Linking It to Performance. The Academy of Management Review, 21(1), 135–172. https://doi.org/10.2307/258632

Lumpkin, G. T., & Dess, G. G. (2001). Linking Two Dimensions Of Entrepreneurial Orientation To Firm Performance: The Moderating Role Of Environment And Industry Life Cycle. Journal of Business Venturing, 16, 429–451. https://doi.org/10.1108/IJOA-02-2019-1665

Man, T. W. Y., Lau, T., & Chan, K. F. (2002). The competitiveness of small and medium enterprises: A conceptualization with focus on entrepreneurial competencies. Journal of Business Venturing, 17(2), 123–142. https://doi.org/10.1016/S0883-9026(00)00058-6

Mashenene, R. G., & Kumburu, N. P. (2020). Performance of Small Businesses in Tanzania: Human Resources-Based View. Global Business Review, 1–15. https://doi.org/10.1177/0972150920927358

Michie, J., & Sheehan, M. (2005). Business strategy, human resources, labour market flexibility and competitive advantage. International Journal of Human Resource Management, 16(3), 445–464. https://doi.org/10.1080/0958519042000339598

Potjanajaruwit, P. (2018). Competitive advantage effects on firm performance : A Case study of startups in Thailand. Journal of International Studies, 10(1), 104–111.

Qamariah, I., & Muchtar, Y. C. (2019). Analizing Business Performance of Small and Medium Enterprises (SMEs) Based on Human Capital, Social Capital and Competitive Advantage. Ecoforum, 8(2), 1–8.

Rashid, M. A., Kalyar, M. N., & Shafique, I. (2020). Market orientation and women-owned SMEs performance: The contingent role of entrepreneurial orientation and strategic decision responsiveness. South Asian Journal of Business Studies, 9(2), 215–234. https://doi.org/10.1108/SAJBS-02-2019-0032

Rehman, A. U., & Anwar, M. (2019). Mediating role of enterprise risk management practices between business strategy and SME performance. Small Enterprise Research, 26(2), 207–227. https://doi.org/10.1080/13215906.2019.1624385

Rehman, S. U., Elrehail, H., Nair, K., Bhatti, A., & Taamneh, A. M. (2021). MCS package and entrepreneurial competency influence on business performance: the moderating role of business strategy. European Journal of Management and Business Economics, ahead-of-p. https://doi.org/10.1108/EJMBE-04-2020-0088

Rosli Mahmood. (2013). Entrepreneurial orientation and business performance of women-owned small and medium enterprises in Malaysia : Competitive advantage as a mediator. International Journal of Business and Social Science, 4(1), 82–90. https://doi.org/10.1177/0266242612455034

Rubio, A., & Aragón, A. (2009). Smes competitive behavior: Strategic resources and strategies. Management Research: Journal of the Iberoamerican Academy of Management SMES, 7(3), 171–190. https://doi.org/10.2753/JMR1536-5433070301

Setyawan Agus, A., Isa, M., Wajdi, F. M., Syamsudin, & Sidiq, N. P. (2015). An Assessment of SME Competitiveness in Indonesia. Journal of Competitiveness, 7(2), 60–74. https://doi.org/10.7441/joc.2015.02.04

Shearn, M. (2012). Understanding the Business-from the Customer Perspective. In The Investment Checklist: The Art of In- Depth Research (pp. 39–51). https://doi.org/10.1002/9781119201410.ch3

Sigalas, C., Pekka Economou, V., & B. Georgopoulos, N. (2013). Developing a measure of competitive advantage. Journal of Strategy and Management, 6(4), 320–342. https://doi.org/10.1108/JSMA-03-2013-0015

Swierczek, F. W., & Ha, T. T. (2003). Entrepreneurial Orientation, Uncertainty Avoidance and Firm Performance. The International Journal of Entrepreneurship and Innovation, 4(1), 46–58. https://doi.org/10.5367/000000003101299393

Wiklund, J., & Shepherd, D. (2005). Entrepreneurial orientation and small business performance: A configurational approach. Journal of Business Venturing, 20(1), 71–91. https://doi.org/10.1016/j.jbusvent.2004.01.001




DOI: https://doi.org/10.3059/insis.v0i0.24077

DOI (PDF): https://doi.org/10.3059/insis.v0i0.24077.g13228

Refbacks

  • There are currently no refbacks.