Competitive Advantage and Entrepreneurial Orientation as Intervening Variables Influence of Market Orientation on Business Performance

Nandang Bekti Karnowati, Fajar Adi Prakoso, Yulis Maulida Berniz, Agapito Barros

Abstract


One of Indonesia's economic development priorities is to develop MSMEs. A large number of MSMEs in Indonesia makes it essential to play their role and contribution as the most significant economic driver by absorbing labor, exports, and investment. This study determined the impact of market and entrepreneurial orientation on competitive advantage and business performance. Then this study assesses whether competitive advantage and entrepreneurial orientation can act as a mediator to achieve business performance. The method uses the Partial Least Square analysis tool with a total sample of 100 respondents who are MSME owners who are members of the Cilacap MSME community. The research findings show that entrepreneurial orientation can act as a full mediator of market orientation relations towards business performance and become a partial mediation of market orientation relations to competitive advantage. Competitive advantage cannot play a role in mediating the relationship between market orientation and entrepreneurial orientation variables to business performance. Market orientation does not directly affect business performance, but entrepreneurial orientation and competitive advantage significantly affect business performance. Market orientation and entrepreneurial orientation directly have a significant positive impact on competitive advantage. 

Keywords: Competitif Adventage, Business Performance, Market Based View, Resource Based View, entrepreneurial orientation


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