Research Article: 2021 Vol: 20 Issue: 2S
Pande Putu Buda Prasada, Universitas Padjadjaran
Erie Febrian, Universitas Padjadjaran, Sumedang
Rita Komaladewi, Universitas Padjadjaran
Wa Ode Zusnita, Universitas Padjadjaran
Market Orientation, Creation Value, Competitiveness, Business Sustainable
The purpose of this study is to examine the relationship between market orientation, value creation, and competitiveness of SMEs in enhancing business sustainability. The research was conducted based on the phenomenon of problems related to business sustainability from SMEs in Jakarta, Indonesia. The resilience of SMEs in doing business has always been an important thing to study; it seems that the government's support to continue to stimulate the growth of SMEs in Indonesia. The study is to explains a business model that can support sustainable business. The research conducted using a survey method for SME entrepreneurs in Jakarta. As respondents are selected, entrepreneurs have been around for at least five years and obtained as many as 207 SMEs. The research results show that SMEs' competitiveness is determined by the support from market orientation and value creation. Besides, it said that SMEs could use competitiveness to achieve business sustainability. However, market orientation and value creation are not directly able to influence sustainable business achievements. The research findings explain the existence of a model of orientation and value creation support to increase competitiveness and indirectly support the achievement of sustainable business. The information found from this research is certainly useful for SMEs in Indonesia as a perspective in measuring the competitiveness achieved. Because competitiveness impacts sustainable business, the government, in this case as a policy provider, can use the results of research as input in supporting and stimulating the development of sustainable business. The interest of sustainable business is not only for SMEs but for companies in general; the model presented is expected to provide new insights regarding maintaining competitiveness and building a sustainable business.
Every company needs competitiveness to support the company's performance (Herciu & Ogrean, 2015). Including SMEs, which are more of an industry capable of supporting the country's economy, requires competitiveness to survive in the field of business competition (Urfa et al., 2013). Business growth, in turn, guarantees the existence of a business, where the business will continue to generate income and provide benefits to stakeholders, namely owners, consumers, suppliers, and the government. Previous studies have explained that the importance of competitiveness in the end for SMEs is in achieving business sustainability. In line with previous studies that explain the relationship between company competitiveness and sustainable business (Ye et al., 2014). Another thing that seems important in the study relating to SMEs' competitiveness is the supporting factor for competitiveness, namely as the main target market. One of the supporting factors for competitiveness in the market orientation (SØrensen, 2009) and value creation (Hsu et al., 2010), a business strategy that focuses on consumers as the target market.
Market orientation is a business strategy that is important for company sustainability (Nasution & Mavondo, 2008), in line with increasing global competition and consumer needs where companies realize that they must always be close to consumers as the main target (Chen et al., 2007). Consumer-oriented companies show continuing and proactive concern for changing market desires according to their consumers' needs (Lopez-Rodrigez et al., 2009). With the value of consumer orientation, SMEs excel in maintaining bonds with consumers and obtaining benefits through consumer trust. In a market orientation, SMEs ultimately focus on understanding the strengths and weaknesses of existing and potential competitors (Lopez-Rodrigez et al., 2009), such as monitoring competitors' behavior to turn into better ideas or proposals to suit consumer needs. Based on previous research studies revealed that market orientation could provide support for the creation of competitiveness of companies such as SMEs (Pinho et al., 2014). The strategy of resource management by business actors in the company's economy in creating valuable products at appropriate prices continues to test in the current competitive era of globalization (Randøy & Oxelheim, 2013). So that in addition to a market orientation strategy for company competitiveness, market attractiveness is needed; this is related to product and consumer value (Chen et al., 2007). Market orientation, in principle, is anything that can attract the target market (Pepi & Horga, 2015). market orientation as a form of market competition provides every company's opportunities to create products according to consumer desires and exceed consumer expectations (Andritzky, 2007). Creating a market orientation is not easy because it requires qualified resources. However, one of the advantages of market orientation is company competitiveness (Chen et al., 2007). One of the weaknesses of the products or services created by SMEs in Indonesia is a market orientation (Mudrikah et al., 2014) due to the weakness of the human resources involved in creating products according to consumer expectations (Hariyanto, 2016).
Changes in consumer behavior require business actors in SMEs to explore consumer values through value creation which is the core of remaining competitive independently in terms of business entity size and industry characteristics (Johannessen & Olsen, 2010). Value creation contains the meaning of innovation from the company that needs to do business competition (Santos-Vijande et al., 2013). Moreover, value creation is one of the business strategies that can support the creation of company competitiveness (Lindman, 2013). In understanding the competence of competitors in detail, one must also realize the value creation that is owned because value creation is a process of identifying the business entity's strengths and characteristics (Chumaidiyah, 2012). Moreover, in a previous study, it has been stated that the company's value creation has an impact on changes in industry competitiveness (Lindman, 2013). In business strategy, market orientation can be a business model that focuses on delivering or delivering products designed according to consumer wants, needs, and requirements and product functions and production efficiency (Kotler & Keller, 2012). Products that consumers value have value to attract consumers' attention to buy them (Chumaidiyah, 2012). The value of a product is usually related to a business entity's efforts to enter new and unknown markets and is closely related to competitiveness (Lee & Yoon, 2015). However, the achievement of product value depends on the resources owned, through value creation. The most important of all the elements of product value created by the company for consumers is value creation because it is related to the size of the product's value created for consumer satisfaction (Johannessen & Olsen, 2010). Examining the competitiveness in SMEs concludes on one goal, namely the creation of competitiveness in SMEs to support sustainable business. The study was conducted to examine the supporting factors related to consumers, namely market orientation and value creation.
Market Orientation
Market orientation is an important part that companies pay attention to because it directly interacts with consumer wants and needs (Maryam et al., 2014). Companies that pay attention to market orientation can know consumer behavior and support the achievement of marketing performance (Roberts, 1990). In practice, companies that understand consumers always associate their business strategies with consumer behavior to improve marketing performance (Gallardo-Vázquez & Isabel Sánchez-Hernández, 2014). The importance of market orientation relates to company performance and opportunities to get a wider market (Zhou et al., 2005); however, market orientation needs to be supported by stakeholders as part of the business strategy. Another indication of market orientation is its impact on business sustainability (Maryam et al., 2014). In fact, for SMEs in general, business sustainability is needed considering that SMEs are very vulnerable to being closed because they cannot survive in competition. There are many economic shocks down by companies in general, including SMEs (Gallardo-Vázquez & Isabel Sánchez-Hernández, 2014). Economic shocks sometimes positively impact because they have new business opportunities, but not infrequently harm business losses or company closures. Economic changes impact the difficulty of company management in changing the decisions that have been made, especially for large companies. In this condition, consumer focus is the right choice through market orientation. For SMEs, market orientation can be used as a business strategy to face economic shocks in another position. One reason is that the absorption of innovation in SMEs is easier when there are economic changes (Risal et al., 2016). The phenomenon of value for customers certainly affects its business strategy, which is also part of the market orientation. To compete in an aggressive and interactive environment, companies must shift their business focus from trade transactions to maximizing customer value intended for the company's business sustainability. Business competition has entered the market orientation area, and every company has realized that this is part of its business strategy (Nasution et al., 2011).
Market orientation tries to bring the product's value in line with consumers' desires and expectations (Maryam et al., 2014). Market orientation theory explains the importance of prioritizing consumer desires in line with company goals. Companies that implement well their market orientation strategy in their behavior continue to strive to provide bargaining power of products according to market expectations carried out on an ongoing basis (Gabler et al., 2015). However, in understanding market potential, companies sometimes need to collaborate directly with consumers, known as the strategic co-creation value (Messersmith & Wales, 2013). Previous research reviews stated that assessing market orientation; it can do through several strategies: market intelligence, intelligence across departments, and organization responsiveness (Cao et al., 2014). Measurements related to market orientation seem to consider more in monitoring market activities, in contrast to other theories which explain that market orientation needs to look at several activities, namely customer focus, intelligent competitor, and cross-functional cooperation (Cravens & Nigel, 2009). In simple terms, in SMEs, market orientation is carried out appearing to depend on several strategies, namely customer orientation, competitor orientation and inter-functional coordination (Narver & Slater, 1990), the three measurements can inform a competitive business strategy. A company's success in business competition depends on the company's ability to determine business strategy; however, in determining the business strategy, it is necessary to support marketing human resources' readiness in assessing market needs (Ye et al., 2013). Through market orientation, it is hoped that it will create a business strategy for the company and create a sustainable business's competitiveness.
Creation Value
Every consumer has high expectations for its products, and the company is expected to meet these demands (Sun et al., 2016). An important consideration from consumers is the superior value compared to similar products (Castro et al., 2006). It means that consumers will only have a product or service if the value offered is considered better by the consumer. All companies with the title of providing the best value to consumers aim to expand market share (O’Cass & Ngo, 2011). In holistic marketing, consumer value creation focuses on consumers (customer focus), core competencies are on the business domain, and collaborative networks with business partners (Kotler & Keller, 2012). Examining this theory states that a company can create consumer value if it can always focus on consumers, has strong core competencies, and has good business partners in its collaborative network. Companies took the approach concerning business reality often fail to create good performance and, at the same time, fail to create the value that consumers expect (Ranganathan, 2011). It has an impact on decreasing consumer assessment of the company, which usually occurs as organizational environments have become more and more complex (Ivancevich et al., 2010). The management of an organization needs to know how to identify, select and segment competitive markets, determine the type of value that will be carry when entering the market; however, if the company has prepared itself through value creation, then this problem does not become meaningful (Becker-Ritterspach & Bruche, 2012).
Value creation is offered by business entities and transforms consumers' involvement to create value creations with business entities (Prahalad & Ramaswamy, 2004). In principle, the theory of value creation focuses on consumers' involvement in providing value to product or service offerings. So that input or information is needed from consumers to present the value expected by the market. Companies, in general, usually provide value creation for the experience of the previous strategy. However, the reality in the field looks different (Todericiu & St?ni?, 2015) because consumers' desires through consumer behavior change over time (Murtiasih et al., 2014). Companies that understand value creation are synonymous with strategies based on consumer concerns, whether those contained in market-driven or market-driver (Qiu et al., 2016). Another opinion regarding value creation is that value creation is related to innovation that increases benefits for consumers, and from the consumer side, value creation is related to an increased value that can impact increasing consumer loyalty (Malhotra, 2003). This opinion emphasizes the importance of value creation concerning values that impact consumer loyalty, in the sense that increasing and maintaining market share or target market depends on the strategy on value creation created by the company. Currently, the company, through the research section, has reviewed the characteristics of consumers, plus technology support through the Marketing Information System aims to analyze consumer wants and expectations more quickly (Ciarli & Valente, 2016). It means that value creation is important to be assessed by companies through business strategies so that many of the fastest efforts are made by companies. In principle, value creation built by a company to gain an edge in competition, and most importantly, to be able to provide competitiveness in business competition and business sustainability (Ranganathan, 2011). Value creation is created by attacking a business whose principle focuses on consumer desires, according to company goals, by collaborating with other mutually beneficial parties (Hartmann & Herb, 2015). The value creation concept used in this research is value creation in terms of the company side, namely the process of creating customer benefits, business domains, and business partners (Kotler & Keller, 2012; Tantalo & Priem, 2016). This is done to consider that the three dimensions of value creation are compatible with the conditions of the unit of analysis in this research. All these measures are often used as a measure in research related to value creation in companies in general.
Competitiveness
Strategic competitiveness will be achieved when a company has successfully formulated and implemented a value creation strategy (Hitt et al., 2013). This explains the existence of a good relationship between the value creation created by the company for consumers and business competition on the achievement of company competitiveness. In principle, competitiveness is a formulation of a strategy that is continuously designed and carried out by the company; in its activities, many factors follow, including consumer and competitor behavior (Alarape, 2013). This means that the company cannot be silent when it has made a business strategy; it must continue to evaluate the activities that occur along with carrying out company operations. When the company is competitive from an operative point of view, the company must design a strategy to complement conditions where competitive prices, superior quality products, and high levels of service to consumers (Castro & Martins, 2013). With regard to companies in general, it was said in previous studies that in the textile and clothing supply chain in the United States (Lee & Karpova, 2018), one method to increase the competitiveness of a company is through a strategic approach from suppliers around the world (Shareef et al., 2008). This study intrigues that business strategy activities need to prioritize the impact of suppliers as a business force. In fact, the field provides an opportunity to increase the competitiveness of companies (Volberda et al., 2011). The customization of demands from consumers and the need for "fast response" in a rapidly changing marketplace has made more and more companies recognize the strategic role of resources in achieving sustainable competitive advantage and improving financial performance (Bowen & Kimencu, 2019). This implicitly reveals that one of the characteristics of the condition of competitiveness is to prioritize the speed of response to any changes that occur in the company environment.
The competitiveness of business firms is related to how well the business model interacts with its environment to produce offers that provide added value (Bowen & Kimencu, 2019). From this theory, there are at least three important elements in this idea. The first, added value, means that eliminating the business entity and its offerings will reduce the size of the overall value. However, the most important thing from this theory is to explain the impact of both the internal and external environment of the company on the creation of company competitiveness (Ozdora-Aksak & Atakan-Duman, 2015). In companies in general, it is known that there are three things that need to be considered in achieving competitiveness, namely the degree of product differentiation, unit prices obtained in export markets, and the duration of trade (Nordas & Kim, 2013). The three measurements are related to the product, price, and distribution activities. Again, competitiveness is always closely related to marketing strategy. The World Economic Forum in the global competitiveness report says that competitiveness is a set of institutions, policies, and factors that determine the level of productivity of an effort (Ruostesaari & Troberg, 2016). Of course, the general opinion from the economic forum examines the competitiveness of the company and competitors, in contrast to the competitiveness, which focuses on consumers and market desires (Dubey et al., 2013). Based on the analysis of several previous research studies, this study measures competitiveness based on indicators that are often used, including those related to the product, price, place, and promotion carried out by companies (Castro et al., 2006; Kotler & Keller, 2012). Through these four measurements, it is hoped that they can become an evaluation of the competitiveness of SMEs in Indonesia, where this study examines the impact on achieving business sustainability.
Business Sustainable
Business continuity is the output or result of implementing all activities related to business activities. Sustainability indicators are sales growth and profitability (Best, 2009). The theory of business continuity is closely related to the results achieved by companies in terms of profit (Kang et al., 2010). This opinion contains the fact that business sustainability is achieved by the company and is the company's goal in general. However, sales growth and profitability can be assessed from many things, so that in assessing business sustainability, it is not only from income but other things such as market share (Ngai et al., 2014). The essence of business sustainability at the beginning explains the financial aspects of the company, even though there are other things that are also important, namely non-financial. Other opinions have also been stated that the business sustainability of a company is inseparable from sales, market share, and profitability (Wheelen & Hunger, 2012). The development of this theory clearly lies in the company's revenue as measured by two main things, namely financial and non-financial. The meaning is that business sustainability can be examined from various sides, especially from a financial or non-financial side. Business sustainability is closely related to company performance, but business sustainability puts forward the company's performance in the future or in the long term (Lee & Park, 2009). From other research, it is also said that business sustainability is a company value that is assessed from marketing performance; in essence, when the level of marketing is good, it will have a good impact on business sustainability (Ingenbleek et al., 2007). So that the business strategy through the marketing team really determines business performance.
Companies often assess sustainability from various aspects, but the marketing and financial performance aspects are the business entities that are closest to business sustainability (Hubbard & Beamish, 2011). Over time, it turns out that many studies have assessed the marketing performance of companies as measured by sales, market growth, and market share (Ngai et al., 2014). This is tantamount to evaluating marketing performance to assess the sustainability of the company's business. In the perspective of financial performance, there are several things that are interrelated, including Return on Investment (ROI), revenue mix, asset utilization (measured by asset turnover), and a significant reduction in costs (Petrini & Pozzebon, 2009). It seems clear that the perspective of financial performance only assesses the financial condition. It is different from business sustainable which is assessed from both sides, namely financial and non-financial (Ozdora-Aksak & Atakan-Duman, 2015). A business performance such as business sustainability can be assessed and evaluated based on its objectives (Ngai et al., 2014). In general, it seems clear that it can be seen from the profitability that comes from both financial and non-financial sources (Petrini & Pozzebon, 2009). Based on the explanation of the concept of sustainability, both from textbooks and previous research journals, business sustainability can be assessed from the state of its profitability (Neu et al., 1998). From some of these measurement indicators, there are indicators that are often used, including sales, market share, and profitability (Ranald, 2002; Wheelen & Hunger, 2012). The three measurements have been tested and, in fact, are able to provide measurements to assess the sustainability of a business because it contains two main things, namely financial and non-financial. Based on these data, in current research, namely on SMEs, the indicators used are related to sales, market share, and profitability.
Methods and Measurement
This research includes survey research, with the research object of entrepreneurs from MSMEs in Jakarta. MSMEs in Jakarta is currently contributing to economic development in Indonesia, and Jakarta is the capital city of Indonesia. Data collected for MSMEs are selected entrepreneurs, where at least they have been doing business for five years and were selected from several sub-districts so that there were 207 entrepreneurs as respondents. Data from respondents were collected through a quantitative questionnaire whose answers had been determined using the Likert approach, the scores of "1" for strongly disagree and "5" for strongly agree. Considering that this research is research with path analysis, the data processing is carried out by using the Smart PLS analysis tool.
The study variables in the research focus on market orientation, value creation, competitiveness, and sustainable business. Market orientation is measured through customer focus, competitor intelligence, and cross-functional cooperation (Cravens & Guilding, 2000; Harris, 2002; Kohli, 2017). Value creation is measured through consumer benefits, business domains, and business networks (Kotler & Keller, 2012; Sutthirak & Gonjanar, 2012; Tantalo & Priem, 2016). Furthermore, competitiveness is measured through product, price, place, and promotion (Kotler & Keller, 2012; Martín-de-Castro et al., 2006). Finally, business sustainability is measured through sales, profitability, and market share (Bocken, 2013; Ranald, 2002; Wheelen & Hunger, 2012). Another study explains that all variables are measured through three strategies except for the variable competitiveness through four measurements, and hypothesis testing is carried out through the research model. A review of previous research has shown that the company's competitiveness can be influenced by market orientation (Cravens & Guilding, 2000; Mashahadi et al., 2016; Pinho et al., 2014) and value creation (de Pablos Heredero & Berzosa, 2011; Lerro et al., 2014; Lindman, 2013), besides that competitiveness is also able to influence sustainable business (Cai et al., 2013; Matos et al., 2017; Melewar et al., 2013). It is also known directly that business sustainability has the possibility to be improved through market orientation (Cravens & Guilding, 2000; Mariadoss et al., 2016; Sheth & Sinha, 2015) and value creation (Ciasullo & Troisi, 2013; Tantalo & Priem, 2016). Examining from previous research reviews, it is used as an adaptation in building research models and designing research hypotheses.
Model and Hypothesis Development
Data sources from SMEs were obtained in 2020, and the data were processed through a research model, namely path analysis (Figure 1). The research model before being analyzed was carried out by model testing and hypothesis testing, while the research hypothesis design was presented below.
H1: Market orientations have a positive correlation with competitiveness.
H2: Creation values have a positive correlation with competitiveness.
H3: Market orientations have a positive correlation with business sustainable.
H4: Creation values have a positive correlation with business sustainable.
H5: The competitiveness of SMEs has a positive correlation with business sustainable.
The research was conducted starting in 2020, where the research began with distributing questionnaires to SMEs entrepreneurs as respondents. Data from the questionnaire obtained a total of 207 respondents who filled invalidly without missing values. Furthermore, the data is processed in two stages, namely, first, testing the feasibility of the research instrument, second testing the feasibility of the research model, and third, testing the hypothesis of the research results. In the initial stage, the characteristics of the respondents are presented, namely, entrepreneurs who fill out the questionnaire. Of all entrepreneurs, it is known that most of them have male gender (89%). It seems clear that the leaders of SMEs are more than men because, as company owners, they also lead the company. From the long-standing side of SMEs, all have been around for at least five years, and most of them have been around for 5 to 10 years (64%). Most of the types of businesses are engaged in Food and Beverage (40%); the rest is spread in craft, fashion, service, and accessories. There are also transaction procedures in entrepreneurship that have been carried out online through several media, including websites, Instagram, Facebook, and other social media. From the character of entrepreneurs, it is known that the main point is that entrepreneurs from SMEs in Jakarta have good entrepreneurial experience, as seen from the length of operation and the way of doing transactions. The next step is testing the research instruments and research models.
Result of Instruments Test
The data processed in the study were 207 from entrepreneurs, then the data were processed through SmartPLS, while the data was tested through the Inner and Outer Models. The Outer Model test was carried out on indicators, which were tested with convergent validity, composite reliability, Average Variance Extracted, and discriminant validity. Convergent validity is measured through outer loading with the assumption that the individual reflective measure satisfies if it is correlated more than 0.30. Discriminant validity indicates whether the measured variable has high reliability if it has composite reliability above 0.7. Average Variance Extracted value is said to be good and meets the criteria when the value is greater than 0.5. Cronbach's Alpha is one of the recommended discriminant validity measures that have a value above 0.7. Based on the data in Table 1, it is known that from all previous tests, namely convergent validity, composite reliability, Average Variance Extracted, and discriminant validity, it is said to meet the requirements. The next test is the Inner Model by looking at the T-Statistics results or parameter coefficients (Table 2). The Inner Model test results from the Outer Weight results in Table 2 show that the results of each indicator are related to the latent variable because T-Statistics>4,250. Based on the results of the Inner and Outer Model tests, it can be said that the research model is acceptable because it has met the Fit Model (Good of Fit) requirements.
Table 1 Construct Reliability and Validity Values |
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Variables | Cronbach's Alpha | rho_A | Composite Reliability | Average Variance Extracted |
Business Sustainable | 0,528472 | 0,560417 | 0,597917 | 0,468056 |
Competitiveness | 0,504167 | 0,518056 | 0,575694 | 0,481944 |
Creation Value | 0,476389 | 0,477083 | 0,572917 | 0,425000 |
Market Orientation | 0,506250 | 0,506944 | 0,588889 | 0,452083 |
Tabel 2 Outer Weight Values |
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Instruments | Original Sample (O) | Sample Mean (M) | Standard Deviation (STDEV) | T Statistics (STDEV) | P Values |
X1 ? Market Orientation | 0,282639 | 0,280556 | 0.019 | 20.994 | 0.000 |
X2 ? Market Orientation | 0,291667 | 0,290972 | 0.021 | 19.775 | 0.000 |
X3 ? Market Orientation | 0,288194 | 0,291667 | 0.043 | 9.563 | 0.000 |
X4 ? Creation Value | 0,279861 | 0,281944 | 0.031 | 13.090 | 0.000 |
X5 ? Creation Value | 0,268056 | 0,265278 | 0.024 | 15.923 | 0.000 |
X6 ? Creation Value | 0,340972 | 0,343056 | 0.034 | 14.348 | 0.000 |
Y1 ? Competitiveness | 0,184722 | 0,182639 | 0.040 | 6.678 | 0.000 |
Y2 ? Competitiveness | 0,209028 | 0,209028 | 0.030 | 9.997 | 0.000 |
Y3 ? Competitiveness | 0,255556 | 0,256944 | 0.023 | 15.671 | 0.000 |
Y4 ? Competitiveness | 0,279861 | 0,278472 | 0.019 | 20.878 | 0.000 |
Z1 ? Business Sustainable | 0,213889 | 0,215278 | 0.034 | 9.081 | 0.000 |
Z2 ? Business Sustainable | 0,270833 | 0,270833 | 0.035 | 11.078 | 0.000 |
Z3 ? Business Sustainable | 0,353472 | 0,350694 | 0.025 | 20.775 | 0.000 |
After testing the research model, in the end, it is known that the results of the model testing are shown in Figure 2. The results explain that the relationship between the variables is said to be positive, especially the relationship between market orientation and value creation on competitiveness, as well as the competitiveness of SMEs to sustainable business. It is also known directly from the positive relationship of market orientation and value creation in sustainable business, although it is not closely related. From the results of the research model test to confirm the results of the research, a hypothesis test is carried out; the summary is presented in Table 3. From the summary of the hypothesis test results table, it is known that there are two hypotheses that are not accepted, namely H3 and H4. The rest have a significant relationship, where the study compares the t-value. The hypothesis is accepted if the t-value is greater than 1.96, and it appears that H1, H2, and H5 are accepted considering the t-value is greater than the standard set.
Tabel 3 Result of Hypothesis Test |
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Hypothesis Test | t-value | Results | |
Market Orientation ? Competitiveness | H1 | 2,568 | Sig. |
Creation Value ? Competitiveness | H2 | 9,033 | Sig. |
Market Orientation ? Business Sustainable | H3 | 1,441 | No |
Creation Value ? Business Sustainable | H4 | 1,953 | No |
Competitiveness ? Business Sustainable | H5 | 7,825 | Sig. |
Market Orientation to Competitiveness
The discussion in this sub-chapter is related to the effect of market orientation conducted by SMEs on their competitiveness. This study describes part of the main research so that the second test was not carried out, or it is still based on the results of the study in Figure 2. Based on the research results, it is known that there is a relationship between market orientation and competitiveness. It is known that there is a value of 0.198, where this value is the value of the relationship between the market orientation and the competitiveness of SMEs in Jakarta. It appears from the value of the relationship is quite close, and it can be interpreted that if SMEs are able to obtain or implement a marketing strategy with a market orientation, it will be able to increase or change the competitiveness of SMEs. It seems that the results affect the relationship between market orientation and competitiveness. The findings of this study are actually in line with previous studies that have been studied in the research section. Where it was conveyed the influence of market orientation on SMEs on industrial competitiveness (Cravens & Guilding, 2000; Pinho et al., 2014). Apart from SMEs, it appears that previous studies have also explained for companies in general that the market orientation of the company is able to change towards positive company competitiveness (Mashahadi et al., 2016). Furthermore, it was explained that competitiveness is the position that SMEs always expect in supporting their business performance.
Market orientation is a significant factor enabling companies to understand the market and develop product and service strategies to meet consumer and market needs. In the increasingly fierce level of competition and technological advances that cannot be denied, an entrepreneur's product will grow. These products will be difficult to distinguish from one another so that products are needed according to market orientation. Of course, this is done to win in a competition, then in marketing, the current product entrepreneurs are not only based on product quality but also depending on the strategy adopted by the company. There is a strategy generally used by companies which are known as market orientation. This requires the cleverness of the company in recognizing consumer tastes so that the innovation it does ultimately is in accordance with the wishes of its customers. Thus, product innovation must really be planned and carried out carefully. A review of the findings of previous studies and a comparison with previous research shows that the current research position can complement previous studies. Research improvement is due to the similarity in the study of research variables, namely market orientation and competitiveness, as well as the object of SMEs. However, the difference lies in the location of the country, and this study is still in the main research section. Thus, further studies for novelty research will be discussed at the end of the explanation. From previous studies presented by Pinho, et al., (2014) that there is a linear relationship between market orientation and the creation of company competitiveness. The study was conducted for a non-profit organization in Portugal; in fact, in the study, it was explained that each organization needed competitiveness to survive and continue to serve consumers. Of course, this resilient data is caused by many things such as organizational culture, especially commitment to market orientation. The study focuses more on SMEs in a country, which was conveyed by Cravens & Guilding (2000), which explains the importance of knowing the wants and needs of consumers so that it is more focused on offering products and services. It is known that focus on consumers is part of the market orientation carried out by Small Businesses today. There are still many studies by other experts that explain the importance of market orientation which is associated with SMEs' competitiveness (Mashahadi et al., 2016). At least from the study and review of several previous studies, current research that focuses on small businesses in Jakarta is in line with previous research and tends to enhance previous research. There is no argument regarding the influence of market orientation on firm competitiveness, especially for SMEs. Market orientation appears to be important in relation to the competitiveness of SMEs, so it is necessary to examine the forming indicators. From the results of statistical data processing and previous analysis, it is known that there are three indicators formed in this study, namely Customer Focus, Competitor Intelligent, and Cross-Functional Cooperation. The three indicators are in line with the marketing strategy in general, but if they are designed and used as objectives for market orientation, they will have a good impact on increasing competitiveness. So that indirectly, it is known that the benefits of a marketing strategy through the marketing mix have a positive relationship on creating competitiveness, especially for SMEs.
Creation Value to Competitiveness
Figure 2 shows a relationship value from the creation value carried out by SMEs on competitiveness. This value is 0.592, which means that there is a close relationship between creating value and competitiveness. The positive relationship that is formed explains that the more value creation is done, the better the formation of competitiveness of SMEs. There are many things that can be done to explain and achieve the competitiveness required by the company, but now it is clear that the implementation of value creation through customer benefits, business domains, and business networks is able to facilitate it. Important creation values are created by SMEs when there is a positive impact on competitiveness. Several things need to be considered from the creation of value, including the creation of customer benefits. The meaning of this creation explains that in offering a product or service to consumers, it is necessary to consider the value contained in it. Because the product to be offered, of course, already has competitors from similar products and non-similar products. This means that many choices are accepted by consumers so that it provides insights for consumers before making choices. The right time to provide value for a product or service to consumers is when consumers consider the product to be selected. Because outwardly, consumers already have two sides in their view of choosing a product, namely the benefits and risks they will get after choosing a product. Therefore, in value creation, it is emphasized on entrepreneurs to explore what value in the product or service can satisfy and diverting consumers' views of the product being offered.
The second side of value creation is the business domain, which more precisely for SMEs relates to market location and position. Of course, location and market position largely determine the existence of SMEs that consumers remember. Many are often mistaken regarding the location and market position so that consumers' views are biased towards the product offerings they receive. Besides that, the network of entrepreneurs is very crucial in the creation of value. Because it can support the acceptance of a product or service by consumers because of a strong network, this network is related to the many relationships between entrepreneurs or SMEs with all stakeholders, both with consumers and with suppliers. At least this network provides a stimulus for Small Businesses to be accepted by consumers. Reviewing previous theories and studies may explain the relationship and influence of value creation on the competitiveness of an industry. The general study has been disclosed by Lerro, et al., (2014) in their study explains that value creation is an integrated concept with intellectual capital and provides opportunities for achieving the competitiveness of the company. This concept applies to companies in general in London; in fact, many companies are exploring the capabilities of corporate human resources and cooperation between company lines to achieve value creation. Value creation is also well developed if it is related to technology; this study was once submitted by de Pablos Heredero & Berzosa (2011). In the research, it is explained that the level of innovation carried out by the company needs to be supported by qualified technology. This supports a change towards the company's creative power in approaching the target market. The result found the impact of the creation of value creation on changes in the positive direction of the company to achieve the desired competitiveness.
It seems that value creation has good support based on previous studies; this support has a positive impact on company competitiveness. Previous studies were discussed in general on companies, but a special study on SMEs has also been presented by Lindman (2013). The study discusses that the source of SMEs' true competitiveness is the value creation of the product and the price offered to consumers. Based on previous research studies, it appears that current research is in line with and tends to improve these studies both in companies in general and on SMEs. Part of this finding means that a lot of support from the results of this study is from previous studies and emphasizes the importance of value creation for SMEs in controlling competitiveness.
Market Orientation to Business Sustainable
Explanations need to be made to identify and analyze the objectives of the next research, namely the objectives related to the influence of market orientation on business sustainability for SMEs in Jakarta. From Figure 2, it is known that there is a value of 0.128, where this value is the value of the relationship between market orientation and business sustainability from SMEs in Jakarta. At first glance, it seems that market orientation is unable to change towards better business sustainability. Although there appears to be a positive relationship, it is only not closely related and tends not to influence. It seems clear that the market orientation is not able to change well from business sustainable. It should be noted that in market orientation, there are several measurements that are Customer Focus, Intellectual Competitor, and Cross-Functional Cooperation. Meanwhile, in terms of business sustainability, it is known that there are several measurements, including sales, profitability, and market share. However, the combination of the two does not have a significant impact on the business performance of SMEs, so that it is not a recommendation to find the novelty of research in this study.
The importance of strategic market planning is now being felt to increase along with changes. Entrepreneurs have several ways to evaluate their performance, but any assessment will take sales and profits into consideration. Some factors can make a market attractive and others less attractive; product life cycle positions and market growth rates are measures of market orientation along with sales and profits. A sustained competitive advantage occurs when SMEs develop a strategy that competitors do not implement simultaneously, do something better than other competitors, or do something that other competitors cannot. Current research certainly needs to be supported, or it could be limiting previous research. The first thing that happens is this research refutes previous research, which states that the implementation of market orientation can easily control sustainable business as stated by Sheth & Sinha (2015), where this literacy study discusses that one of the strategies, namely value creation and market orientation, is a strategy that provides opportunities for the business sustainability of a company. This research focuses on B2B company strategy but is conducted qualitatively. So that further studies can be carried out empirically to better ascertain the existence of a market orientation whether it can directly meet the needs of business sustainability. The first study has explained that it is not in line with current research; the next study that is not in line is the study of Cravens & Guilding (2000). The study conveys previous research conducted in the USA empirically and explains that market orientation is one of the indicators of achieving sustainability in a company. The study was conducted exclusively in retail, looking different from the current research for SMEs. So that market orientation is not always ableto influence business sustainability. Meanwhile, research that is in line with this research is in the research discussed by Suh & Kim (2014) in Korea. That market orientation can be useful for improving business performance, which is supported by the level of innovation, but this is not the case with sustainable business because business sustainability is determined by many factors, especially for SMEs, which range is related to sustainable competitiveness. Thus, it seems clear that not all business strategies can support sustainable business; it all depends on long-term or short-term targets.
Creation Value to Business Sustainable
The next study that will be discussed is the effect of value creation carried out by SMEs on sustainable business. When examined, it appears that there is a good positive relationship between the two variables, so that it can be seen at the outset that the higher the value creation value implemented by SMEs will have a good impact on business sustainability. Furthermore, to determine the effect value, the coefficient of termination is calculated. Part of this finding can, in fact, answer from the research objective that empirically, it is said that value creation is able to properly influence business sustainability for SMEs in Jakarta. Several things from value creation that entrepreneurs need to know are the measurement of customer benefits, business domains, and business networks. These three measurements are related to developing sales, profitability, and market share of SMEs. The combination of market orientation and competitive position creates a portfolio position for any product market. An attractive market is likely to carry out an offensive strategic market plan to improve its competitive position and market share position when the firm's competitive position is average or below. These offensive strategies can range from improving competitive positions and market share in the current product market to entering a new market with an unclear market share. In addition, SMEs can explore the possibility of using an offensive strategic market plan to seek to emerge in an underdeveloped market where the firm will have a strong position of advantage.
Market planning through value creation is basically carried out to grow and involve strategies that are penetrating or growing the current market or entering and developing new markets. In general, firms in high market share positions in emerging and mature markets will use a defensive strategic market plan to maintain a level of cash flow that supports short-term profit performance and shareholder value. Without a strategic market plan and profitability, companies will face a short-term situation in terms of profit performance and will lack the resources to invest in offensive market opportunities that are growth-oriented and business sustainable in their path.
The results of research at this stage are certainly in line with several previous studies. First, from Sebhatu & Enquist (2007), the results of the research stated that in controlling sustainable business, it is necessary to have a coordinated control system and the creation of value creation. The impact of this collaboration provides possibilities for business sustainability and company performance. The second research from Ciasullo & Troisi (2013), in the results of research on SMEs, explains the importance of value creation created from products and services to maintain a sustainable business. This is the same as conveyed by Tantalo & Priem (2016) regarding the importance of value creation from companies in general, which synergizes with stakeholders to maintain a market position and be business sustainable.
Competitiveness to Business Sustainable
The final piece of research examined is the influence of the competitiveness of Small Businesses on business sustainability.When examined from the research model presented in Figure 2, it is known that competitiveness is a mediation between the four factors that form, namely market attractiveness, unique capabilities, market orientation, and value creation with business sustainability. As a mediation, competitiveness becomes two important parts, namely the value of support for sustainable business, or becomes the final goal of this research. The result is necessary to study the full research model. However, this time the competitiveness is checked and evaluated its performance directly in business sustainability. It can be assumed that the higher the competitiveness of SMEs, the better it is in determining sustainable business. This is, of course, based on a fairly strong positive relationship between research variables which is quite influential, so that competitiveness is said to be one of the business strategies that need to be considered when talking about sustainable business.
In competitiveness, SMEs are known for several measurements, including product, price, place, and promotion. All these measures are the marketing mix that is commonly used to determine marketing strategies in approaching the target market. However, this time it was assessed to measure the competitiveness of SMEs with quite good results. Based on the result, it can be assumed that competitiveness comes from the marketing strategies that are owned, the ability of entrepreneurs in making the marketing mix will determine the competitiveness of SMEs. Furthermore, this marketing strategy has a good impact on business sustainability. Of course, these findings can be interpreted about the importance of an integrated marketing strategy to achieve business sustainability. In the end, SMEs are said to be able to survive in business competition and keep their business running when they can provide related marketing strategies as company competitiveness. Finally, through competitiveness, sales, profitability, and market share are obtained for SMEs in Jakarta. Increasing competitiveness of SMEs must be gradual, meaning that increasing competitiveness begins with efforts to win the competition. The various conditions of the competitiveness of SMEs are a continuous form of coaching is needed to improve the standard of life for SMEs in Indonesia. The orientation and focus of empowering SMEs need to be improved; this empowerment includes providing easy access to company functions and providing supporting facilities so that SMEs are truly able to apply general principles that apply in the economy consistently and consequently and efficiently. One of the efforts that can be made is to establish a strong business network. A business network is one of the important factors in an SME's business to increase economies of scale, efficient business management, and expand market share. SMEs that have a strong business network will be the capital to be able to carry out their operational activities effectively and efficiently so that the business network can also be a capital for the company's competitiveness.
Competitiveness is closely related to productivity which determines the success of increasing the standard of living of business actors, and at the level of SMEs, productivity is highly dependent on the ability to collaborate with large businesses or fellow SMEs, creating competitive advantage, proper management, appropriate technology, continuous innovation, paying attention the quality, value and uniqueness of the product and how the efficiency of the product is produced so that the company can compete fiercely with its competitors. Increasing competitiveness of SMEs must be gradual, meaning that increasing competitiveness begins with efforts to win the competition at the local level. Then it is developed for an increasingly expanding area or area so that hierarchically local business actors can play and win the competition gradually and naturally. This research is in line with previous studies and tends to improve the research. First said by Cai, et al., (2013), regarding the competitiveness of companies in China, it is necessary to continue to be developed because competitiveness, especially in companies engaged in IT, is needed. This is sustainable and has an impact on business sustainability. If IT companies do not move quickly with innovations to increase competitiveness, business sustainability is not well achieved. Another study presented by Melewar, et al., (2013), who studied multi-national companies, examined the results of their research to explain the relationship between the achievement of business sustainability and the creation of company competitiveness in the market. However, in developing a sustainable business, several important roles of corporate branding, corporate identity, and corporate reputation are needed. The role of the company's competitiveness in several business strategies and ultimately in business sustainability. The latest study presented by Matos, et al., (2017) emphasizes that, in essence, IT development in a city involves two interconnected things, namely competitiveness and business sustainability. This sustainability is related to the company and its development. It is clear from several previous studies that business sustainability can be controlled if companies gain competitiveness in doing business. This also applies to SMEs in Jakarta, considering that it has been tested empirically. This finding is certainly in line with previous research and further enhances previous research, but currently, the focus is on SMEs in Indonesia.
Competitiveness is the company's discovery of a business strategy that is not easily imitated by its competitors and is able to provide business advantages through the company's performance. There are many determinants of the creation of competitiveness, including value creation, unique capabilities, and market orientation. However, what is most capable of determining the competitiveness of SMEs in Jakarta is value creation. Research studies on competitiveness that are influenced by value creation, unique capabilities, and market orientation complement previous studies and tend to refine these studies through current studies that focus on SMEs. However, it is realized that in determining competitiveness, support from other factors, both internal and external, is needed. SMEs in Jakarta are the same as SMEs in general in the world because they are unique in implementing innovations in both their products and services. The scale of the company is a determining factor and makes the company strong in facing the economic stability of the country. Competitiveness is one of the business strategies that SMEs also need to pay attention to because theoretical studies can support not only performance but are closely related to the level of company innovation.
Every study has limitations because of the time and other things that arise at the time of the research, as is the case with current research. Where it still needs to be continued because, in fact, there are many factors in theory that can explain and evaluate the competitiveness of the company. It is recommended that further research examines other factors that have a relationship with company competitiveness, namely the level of innovation or government regulatory support. Besides that, it is known that there are many SMEs in a country like Indonesia; it would be better if the data source was expanded because the more data, the better. Besides, it is suggested to study the types of SMEs, considering that SMEs consist of several types of companies, from small to large.