The Role of Product Innovation Mediation in the Relationship between Market Orientation and Competitive Advantage in Culinary Sector MSMEs
DOI:
https://doi.org/10.58812/wsjee.v4i01.2674Keywords:
Market Orientation, Product Innovation, Competitive Advantage, Culinary MSMEsAbstract
This study aims to examine the mediating role of product innovation in the relationship between market orientation and competitive advantage among Indonesian culinary sector Micro, Small, and Medium Enterprises (MSMEs). A quantitative research design was employed using survey data collected from 200 MSME owners and managers. The measurement instrument utilized a five-point Likert scale, and data were analyzed using Structural Equation Modeling–Partial Least Squares (SEM-PLS 3). The results indicate that market orientation has a significant positive effect on product innovation and competitive advantage. Product innovation also shows a strong and significant influence on competitive advantage, highlighting its role as a key strategic capability in the culinary industry. Furthermore, mediation analysis confirms that product innovation partially mediates the relationship between market orientation and competitive advantage, suggesting that the ability to transform market insights into innovative products strengthens business competitiveness. The findings emphasize the importance of integrating customer focus, competitor awareness, and innovation strategies to achieve sustainable competitive advantage. This study contributes to the literature on strategic entrepreneurship and MSME competitiveness by providing empirical evidence from the Indonesian culinary sector and offers practical implications for business owners and policymakers in promoting innovation-driven development.
References
[1] M. Yaskun, Sudarmiatin, Agus Hermawan, and Wening Patmi Rahayu, “The Effect of Market Orientation, Entrepreneurial Orientation, Innovation and Competitive Advantage on Business Performance of Indonesian MSMEs,” Int. J. Prof. Bus. Rev., vol. 8, no. 4 SE-Articles, p. E01563, Apr. 2023, doi: 10.26668/businessreview/2023.v8i4.1563.
[2] S. Ningsih and B. Tjahjono, “Digital Marketing Innovation for MSMEs through ChatGPT Integration and Management Information Systems: A Technological Transformation Approach for Competitive Advantage,” J. Minfo Polgan, vol. 13, no. 1, pp. 1033–1044, 2024.
[3] L. Farida, M. F. Afandi, R. A. Sularso, I. Suroso, and N. A. Putri, “How financial literacy, innovation capability, and human capital affect competitive advantage and performance: evidence from creative msmes,” 2019.
[4] M. Kamyabi and H. Alipour, “An Investigation of the Challenges Faced by the Disabled Population and the Implications for Accessible Tourism: Evidence from a Mediterranean Destination,” Sustain., vol. 14, no. 8, Apr. 2022, doi: 10.3390/su14084702.
[5] Q. Xu, “Study on the Impact of Employee Diversity and Inclusive Management on Organizational Prformance,” Sci. J. Econ. Manag. Res., vol. 6, no. 7, pp. 9–13, 2024, doi: 10.54691/q1zzq579.
[6] Z. Zulfadhli, D. Desfitrina, and J. Pramajaya, “The Effect of Financial Literacy, Access to Capital, Entrepreneurial Orientation, and Market Orientation on the Growth and Sustainability of Micro and Small Enterprises in Palembang,” Es Econ. Entrep., vol. 3, no. 02, pp. 189–201, 2024.
[7] S. A. Djemma, A. Bakti, A. Muktamar, and H. Hakidah, “Pengaruh Keragaman Produk dan Layanan Toko Terhadap Tingkat Kepuasan Pelanggan pada Toko Alizah Mart Sengkang,” Indones. J. Innov. Multidisipliner Res., vol. 1, no. 3, pp. 165–181, 2023, doi: 10.31004/ijim.v1i3.18.
[8] J. Jin, L. Ma, and X. Ye, “Digital transformation strategies for existed firms: from the perspectives of data ownership and key value propositions,” Asian J. Technol. Innov., 2020, doi: 10.1080/19761597.2019.1700384.
[9] O. Oktavinus, S. Zaid, and H. Yusuf, “Pengaruh Orientasi Pasar Dan Inovasi Produk Terhadap Keunggulan Bersaing Dan Kinerja Pemasaran Pengolahan Rumput Laut Di Wakatobi,” J. Ilmu Manaj. Univ. Tadulako, vol. 5, no. 2, pp. 211–227, 2020, doi: 10.22487/jimut.v5i2.153.
[10] Y. Wu, X. Xie, C. Lassala, and S. Ribeiro-Navarrete, “Bribery, female-led start-ups and product innovation performance in transition economies: the moderating roles of institutional support and self-control,” Manag. Decis., 2023.
[11] M. Wehrle, H. Birkel, H. A. von der Gracht, and ..., “The impact of digitalization on the future of the PSM function managing purchasing and innovation in new product development–Evidence from a Delphi study,” … Supply Manag., 2022.
[12] H. Pai, “A Case Study on the Impact of Brand Image on Customer Buying Behaviour with Special Reference to Nilgiris Supermarket in Mangalore,” Interantional J. Sci. Res. Eng. Manag., vol. 08, no. 01, pp. 1–10, 2024, doi: 10.55041/ijsrem28211.
[13] S. Riyanto, E. Endri, and N. Herlisha, “Effect of work motivation and job satisfaction on employee performance: Mediating role of employee engagement,” Probl. Perspect. Manag., vol. 19, no. 3, pp. 162–174, 2021, doi: 10.21511/ppm.19(3).2021.14.
[14] D. Mailani, M. Z. T. Hulu, M. R. Simamora, and S. A. Kesuma, “Resource-Based View Theory to Achieve a Sustainable Competitive Advantage of the Firm: Systematic Literature Review,” Int. J. Entrep. Sustain. Stud., vol. 4, no. 1, pp. 1–15, 2024.
[15] R. A. S. Surya, U. Afifah, M. Khoiriyah, and V. Oktari, “Impact of Entrepreneurship Orientation, Innovation, Market Orientation and Total Quality Management on SME Performance,” Int. J. Organ. Behav. Policy, vol. 1, no. 1, pp. 37–50, 2022.
[16] A. Puspaningrum, “Market Orientation, Competitive Advantage and Marketing Performance of Small Medium Enterprises (SMEs),” J. Econ. Business, Account. Ventur., vol. 23, no. 1, p. 19, 2020, doi: 10.14414/jebav.v23i1.1847.
[17] Y. Hang, M. Sarfraz, R. Khalid, I. Ozturk, and J. Tariq, “Does corporate social responsibility and green product innovation boost organizational performance? a moderated mediation model of competitive advantage and green trust,” Econ. Res. Istraživanja, vol. 35, no. 1, pp. 5379–5399, 2022.
[18] M. Wang, Y. Li, J. Li, and Z. Wang, “Green process innovation, green product innovation and its economic performance improvement paths: A survey and structural model,” J. Environ. Manage., vol. 297, p. 113282, 2021.
[19] N. Azizah, J. H. Purnomo, and ..., “Efektivitas Strategi Pemasaran Produk Tabungan Haji Dalam Meningkatkan Keunggulan Kompetitif di BRI Syariah Kantor Cabang Pembantu Bojonegoro,” MIYAH J. Stud. …, 2020.
[20] H. Blichfeldt and R. Faullant, “Performance effects of digital technology adoption and product & service innovation – A process-industry perspective,” Technovation, vol. 105, p. 102275, 2021, doi: https://doi.org/10.1016/j.technovation.2021.102275.
[21] Y. KILIÇLI, “The Relationship Between Intellectual Capital and Competitive Advantage: A Meta-Analysis Study,” Akad. Araştırmalar ve Çalışmalar Derg., vol. 14, no. 27, pp. 335–360, 2022.
[22] H. Gharbi, A. E. E. Sobaih, N. Aliane, and A. Almubarak, “The Role of Innovation Capacities in the Relationship between Green Human Resource Management and Competitive Advantage in the Saudi Food Industry: Does Gender of Entrepreneurs Really Matter?,” Agriculture, vol. 12, no. 6, p. 857, 2022.
[23] P. Hadi, “Effect of product innovation on SME’s performance: The moderating role of organizational learning and market orientation,” Int. J. Bus. Ecosyst. Strateg., vol. 5, no. 2, pp. 47–54, 2023.
[24] S. Fatonah and A. Haryanto, “Exploring market orientation, product innovation and competitive advantage to enhance the performance of SMEs under uncertain evens,” Uncertain Supply Chain Manag., vol. 10, no. 1, pp. 161–168, 2022.
[25] Y. Zhu, H. Zhang, A. B. Siddik, Y. Zheng, and F. A. Sobhani, “Understanding Corporate Green Competitive Advantage through Green Technology Adoption and Green Dynamic Capabilities: Does Green Product Innovation Matter?,” Systems, vol. 11, no. 9, 2023, doi: 10.3390/systems11090461.
[26] R. Gómez-Prado et al., “Product innovation, market intelligence and pricing capability as a competitive advantage in the international performance of startups: Case of peru,” Sustainability, vol. 14, no. 17, p. 10703, 2022.
[27] M. Fitri, S. A. A. Nuha, and N. Nurudin, “Increasing Marketing Performance Through Customer Orientation, Competitor Orientation and Product Innovation,” J. Digit. Mark. Halal Ind., vol. 4, no. 2, pp. 59–74, 2022.
Downloads
Published
Issue
Section
License
Copyright (c) 2026 Feliks Anggia Binsar Kristian Panjaitan, Muhammad Taali
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
Facebook 
Instagram 
Twitter 
Youtube 
westscience.journals@gmail.com