The Effect of Innovation Orientation, Marketing Capability, and Dynamic Capability on Competitive Advantage and Business Performance: A Study of Batik SMEs on Sumenep Regency
DOI:
https://doi.org/10.31102/agrosains.2026.11.1.51-73Keywords:
Business performance, competitive advantage, dynamic capability, innovation orientation, marketing capabilityAbstract
This study aims to analyze the effects of innovation orientation, marketing capability, and dynamic capability on competitive advantage and business performance among batik SMEs in Madura Island. This research employed an explanatory quantitative approach involving 100 batik SME managers in Sumenep Regency selected through purposive sampling. The data were analyzed using variance-based Structural Equation Modeling with WarpPLS. The results show that innovation orientation, marketing capability, and dynamic capability have positive effects on competitive advantage and business performance. Competitive advantage also has a positive effect on business performance. These findings indicate that batik SMEs cannot rely solely on product uniqueness and local cultural value. They also need to strengthen product innovation, market sensing capability, customer relationships, adaptability to change, and responsiveness to competitive dynamics. The research model demonstrates strong explanatory power for competitive advantage and business performance, suggesting that the combination of innovation orientation, marketing capability, and dynamic capability serves as a strategic foundation for improving the sustainability of batik SMEs. Empirically, this study contributes to the development of strategic management literature on SMEs in local creative industries, particularly in the context of Madurese batik.
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