The effect of market orientation and innovation on competitive advantages

Abstract

Purpose- Identify competitive advantages of embroidery SMEs embroidery from the aspect of market orientation and SME innovation. SME market orientation is applied from the ability of SMEs in finding market information to develop strategies and policies while SME Innovation from SMEs ability to apply technical innovation, product / service innovation and process innovation. Methodology- Population of this research is the entrepreneurs and managers of SMEs embroidery in Pakis subdistrict Malang and Bangil subdistrict Pasuruan with a sample of 90 respondents. Analysis of the data in this study is done by using multiple regressions. Findings- The results showed that the market orientation and innovation have a significant effect on competitive advantage. In order to gain a competitive advantage, then entrepreneurs and managers of small and medium enterprises (SMEs) embroidery in District Pakis Malang and Bangil Pasuruan develop marketing strategies by taking into account market orientation with the emphasis on the ability to monitor competitors and develop or doing innovations related to new products. Conclusion, Market orientation affects the competitive advantage which is an indicator of competitor orientation and Innovation affects on the competitive advantage which is an indicator of technical innovation that are considered to have the largest or most powerful contribution as a reflection of the innovation variable. Keywords: SME embroidery, market orientation, innovation and competitive advantage. JEL Codes: C12,L26,M31