Analysis of the Impact of Innovation as a Mediator of the Relationship between Programs and Performance on the Competitive Advantage of MSMEs in Indonesia

Abstract

In implementing the 4.0 marketing strategy, micro, small and medium business actors need to be open to market changes and be willing to allocate funds for marketing activities. This study aims to analyze the effect of innovation mediation on the relationship between programs and performances on the competitive advantage of SMEs. This study's research method includes library and field research design with a quantitative approach. This study's research subjects were SMEs in Indonesia's culinary sector. Data collection techniques using observation, interviews, questionnaires, and documentation. The data analysis method used is Partial Least Square (PLS). The data analysis test tool uses the Smartpls statistical software. The study's results stated that programs and performance positively and significantly affected innovation. The results of further research confirm that programs and performance positively and significantly affect competitive advantage. Further results conclude that innovation can mediate the relationship between programs and performance on competitive advantage. The conclusion of this study explains that to encourage a sustainable competitive advantage to be different from competing products, MSME actors need to start with a new marketing strategy in providing solutions when selling products to consumers and being able to design content relevant to product branding.