The Role of Mediation on Product Innovation and Market Orientation Related to both Entrepreneurial Orientation and Competitive Advantage

Ifa Khoiria Ningrum, IKN The Role of Mediation on Product Innovation and Market Orientation Related to both Entrepreneurial Orientation and Competitive Advantage. The Role of Mediation on Product Innovation and Market Orientation Related to both Entrepreneurial Orientation and Competitive Advantage, 13 (3). pp. 622-639.

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Abstract

The purpose of this study is to know and analyse the role of an entrepreneurial orientation towards competitive advantage of small and medium enterprise (UKM) through product innovation and market orientation. Entrepreneurial orientation is the character of entrepreneurship that is attached to an individual or an organisation. In this study, this character is either innovative, proactive or risk taker. The innovative character is the ability of the UKM to create products that are not only good quality but also provide more valuable products to its consumers. The proactive character is related to the UKM’s ability in responding to market phenomenon and adapting in the competitive atmosphere. The last, the risk taker, is related to the bravery and ability of the UKM in facing business risks as well as taking advantage of its opportunities. This study was conducted in UKMs that produce batik in the Malang Regency area. By utilising the quantitative explanatory research method and saturated sampling, the entire population of UKM batik producers in the Malang Regency area were used as the research sample. There are 66. The analytical tool is PLS. The research findings showed that an entrepreneurial orientation has a significant effect on competitive advantage. Product innovation and a market orientation also significantly affect competitive advantage. A market orientation partly mediates the effect of entrepreneurial orientation to competitive advantage. Keywords: Entrepreneurial Orientation, Product Innovation, Market Orientation, Competitive Advantage, UKM Batik.

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