Analysis of Business Strategies in Increasing Competitive Advantage for SMEs in the Digital Era

Calculus-based creativepreneurship is an innovative approach aimed at enhancing the competitiveness of Micro, Small, and Medium Enterprises (MSMEs) by applying mathematical concepts in business strategies. In the midst of the creative economy and digital transformation, MSMEs face challenges related to product innovation, financial management, and optimal use of digital technology. Limited access to data-driven training and quantitative analysis skills hinders effective and measurable business decision-making. This community service activity aims to bridge the gap between academic theory and field practice by integrating calculus concepts into MSME business decision-making processes. The program was conducted as part of the Raharja Enrichment Program (REP), which adopts the Outcome-Based Education (OBE) approach to provide practical, hands-on learning experiences. The method involved direct consultation with MSME actors. Students conducted observations, problem identification, and data analysis to apply calculus in calculating production costs, setting selling prices, break-even analysis and profit projections. Additionally, students used basic software tools to simulate cost and revenue scenarios and their impact on profit margins, making the learning experience more contextual and practical. The results show that the application of calculus supports MSMEs in improving operational efficiency, developing product innovation, and implementing more systematic, data driven financial strategies. Several partner MSMEs began adopting periodic performance evaluations using function graphs and rates of change. The integration of calculus in the development of creativepreneurship through REP provides dual benefits empowering MSMEs and enhancing student competencies. This model represents a strategic step toward building creative, data-based business solutions and can be replicated across various business sectors in the digital era.

Objectives: This research aims to explore strategies for improving the sustainability of micro, small, and medium enterprises (MSMEs) in the era of digital transformation by identifying the key factors and challenges businesses face in adopting digital technologies. Research Design & Methods: This research uses a qualitative approach with a literature review methodology to analyze existing studies and best practices related to digital transformation strategies and MSME sustainability. Findings: The research identified key aspects of sustainability that support the digital transformation process in MSMEs: digital presence, data analytics, process optimization, customer experience, and digital skills and training. Furthermore, sustainability practices such as adaptability, collaboration, risk management, continuous learning, scenario planning, crisis communication, and cybersecurity play an important role in ensuring business continuity in the digital age. Implications & Recommendations: The successful digital transformation of MSMEs requires a comprehensive approach that includes technology, digital skills, business innovation, and organizational culture. Policy support through regulations, incentives, and training is also a key factor in improving the readiness of MSMEs in the digital era. Contribution & Value Added: This study presents a strategic framework for MSMEs in the face of digital transformation, helping to overcome challenges and promote sustainability. The findings contribute to the academic literature and guide practitioners, policymakers, and researchers.

The digital era has brought significant changes to various aspects of life, including the business world. Information and Communication Technology (ICT) offers new opportunities for Micro, Small, and Medium Enterprises (MSMEs) to innovate and enhance their competitiveness through various aspects such as products, processes, and business models. MSMEs play a crucial role in the Indonesian economy, contributing approximately 60% to Gross Domestic Product (GDP) and absorbing over 97% of the workforce. Despite this, MSMEs often face challenges such as limitations in capital, technology, and market access. Digital transformation presents great potential to address these challenges by improving operational efficiency, expanding market reach, and developing more relevant products and services. Business model innovation, which involves the use of digital technology to create effective solutions, can enhance MSME performance, as demonstrated by previous research. However, barriers such as limited resources and digital skills often hinder technology adoption. This research aims to examine the role of innovation in the development of MSME business models in the digital era, focusing on the utilization of digital technology, success factors of innovation, and impacts on business performance. Additionally, the study will explore strategies to overcome obstacles in the innovation process. The research is expected to provide in-depth insights and practical recommendations for MSMEs in developing innovative and sustainable business models in the digital era.

Purpose:The purpose of this study is to explore the impact of business strategy development, mainly focusing on product innovation, competitive advantage, and market orientation, on the marketing performance of micro, small, and medium enterprises (MSMEs) in Bengkulu Province. The research emphasizes the importance of optimizing marketing performance to boost economic outcomes, not only for large enterprises but also for MSMEs, which play a significant role in local economies.Design/Methodology:This research utilizes a descriptive quantitative methodology to investigate the proposed relationships. A non-probability sampling technique, precisely the judgmental (purposive) method, was employed to select a sample of 500 owners or managers of MSMEs across various districts of Bengkulu Province, including Kaur, Seluma, Lebong, Kepahiang, and Central Bengkulu. The data were subjected to reliability and validity tests based on pre-test results, and multiple linear regression was applied to analyze the main hypotheses.Findings:The findings reveal that product innovation, competitive advantage, and market orientation all have a positive and significant influence on the marketing performance of MSMEs in Bengkulu Province. The results highlight the critical role these factors play in enhancing the marketing effectiveness of MSMEs, demonstrating that improvements in these strategic areas can lead to substantial gains in overall marketing performance.Practical Implications:The practical implications of this research suggest that MSME owners and managers should focus on strengthening their product innovation capabilities, leveraging competitive advantages, and adopting a more market-oriented approach to improve marketing performance. These strategies could drive economic growth and sustainability for MSMEs in Bengkulu Province, contributing to broader regional economic development.Originality/Value:This study offers valuable insights into the marketing performance of MSMEs in a developing region, specifically Bengkulu Province. By focusing on the combined impact of product innovation, competitive advantage, and market orientation, the research provides a comprehensive understanding of how these strategic elements influence MSME marketing outcomes. The originality lies in its application to a relatively under-researched context, offering practical recommendations for MSME development.

Technology has developed very rapidly in today's era which opens the way for developments in the 4.0 revolution. The increasing role of the technology is supported by the presence of Big Data, Datamining, Internet of Things, AI and so on. The ease of access and use provided by technology causes technology to be widely used in all companies. Especially in recent years where the whole world has been hit by an outbreak of a fairly deadly disease, namely Corona Virus Disease (Covid 19). In this case, all state governments in the world have taken policies to carry out lockdowns, which means limiting all community activities, especially activities outside the home and also human interaction. Likewise for small companies such as Small and Medium Enterprises (SMEs) who also have to feel the impact of the COVID-19 pandemic which is quite great. Operational processes as well as business processes in SMEs must also be carried out using technology. Digital transformation is an expression used for changes in organizations that are influenced by technology. In the era of digital transformation, the business world is expected to be able to adapt to changes that occur and adjust its business strategy in order to maintain its competitive advantage. For SMEs themselves, digital transformation must be carried out, if not, of course, SME companies will find quite a lot of losses and can cause the company to go bankrupt. Currently, SMEs have realized that the use of technology is a key that can be used for business development. SMEs use technology to find general business-related information for the company

Digital transformation has become an important key in driving global economic growth, especially for Micro, Small and Medium Enterprises (MSMEs) in Indonesia. In the face of increasingly fierce global competition, MSMEs need to take advantage of the opportunities offered by digital transformation to remain relevant and competitive. Although there are challenges such as digital literacy, access to technology, and data protection, MSMEs can overcome these through awareness of data security and implementing best practices in information management. By adopting digital technology, MSMEs can expand market reach, increase operational efficiency and optimize business decision making. A comprehensive strategy for overcoming challenges and exploiting digital opportunities is needed, such as the development of a digital transformation plan that involves concrete steps to achieve business goals through digital platforms. Through understanding the concept of digital transformation and applying descriptive qualitative methods, MSMEs can make optimal use of digital technology to increase competitiveness, expand markets, increase income and reduce operational costs. With full support from stakeholders, MSMEs in Indonesia have a great opportunity to develop and survive in this digital era.

In the current era of globalization and digitalization, Micro, Small, and Medium Enterprises (MSMEs) face increasingly complex challenges in maintaining and improving their competitiveness. Optimizing strategic management is crucial to ensure that MSMEs can not only survive but also excel in the tight business competition. This study aims to identify and analyze effective management strategies for MSMEs to improve their competitiveness. The research methodology involves qualitative and quantitative analysis through case studies of MSMEs in various industrial sectors. Data were obtained from in-depth interviews with MSME owners, surveys, and internal documentation analysis. Key findings indicate that MSMEs that successfully implement optimal management strategies—such as product innovation, utilization of digital technology, effective human resource management, and targeted marketing strategies—can significantly improve their competitive position. This study concludes that the implementation of strategic management based on a deep understanding of market needs, adaptation to changes in the business environment, and the use of modern technology are key factors in achieving competitive advantage. Practical recommendations for MSMEs include developing market analysis capabilities, improving digital skills, and implementing more structured management practices. By implementing these recommendations, MSMEs are expected to increase their competitiveness and contribute more to local and national economic growth.

The rise of Micro, Small, and Medium Enterprises (MSMEs) in society requires them to keep up with the times. Home-based businesses, or what are commonly called home-based MSMEs, are also now competing on a large scale with their business strategies. As technology continues to develop, so do the strategies for business development, which increases competition. Therefore, in this digital era, where Android is used as a strategy for business growth, MSMEs must compete to expand their businesses, especially by utilizing popular apps like Gojek and Grab. MSMEs that use Gojek and Grab as partners often offer free shipping vouchers and price reductions as part of their strategy to increase sales. However, MSMEs going digital still face challenges in coping with the rapidly evolving digital era. MSMEs that still rely on traditional marketing methods need to work harder to develop business strategies that are now accessible to everyone. A good business strategy is one that creates a competitive advantage. The right business strategy will also ensure the longevity of the company, as desired by the business owner. The purpose of this community service is to improve understanding and enhancement of effective business strategies, especially in the era of digitalization. Many MSMEs close their businesses due to failing in marketing competition, resulting in low profits or, in some cases, no profit at all. This research was conducted to prevent such situations by providing training on business strategies and how these strategies can be used to enhance competitiveness in the digital era. The method used in the training is offline or face-to-face with mentoring, through analysis and problem-solving. The materials provided focus on business strategies to improve competitiveness in the digital era, delivered through lectures, training sessions, Q&A, and demonstrations.

The development of fast-moving consumer goods (FMCGs) retail has demonstrated an evolution of buyer–seller interactions. In the era of digital transformation, FMCGs and micro, small, and medium enterprises (MSMEs) can easily use website applications to shop for various products from suppliers, make payments, and access a wider variety of products with more efficient delivery. However, empirical studies on loyalty drivers on B2B relationships for business sustainability in the retail industry have not received much attention. This research aimed to examine the factors that influence loyalty and analyze the mediating role of MSME loyalty by discussing a new conceptual framework designed based on the buyer–seller relationship theory and relational marketing. Data were collected from 500 owners or managers of FMCG retail stalls in various provinces in Indonesia and analyzed using structural equation modeling (SEM). The results showed that merchandising, website quality, commitment, and satisfaction have a positive effect on loyalty, as opposed to service quality and trust. There are also different roles in the mediating variables of trust, commitment, and satisfaction on retail store loyalty. These findings were useful for policymakers, managers, and practitioners to clarify the influence of service quality, merchandising website quality, and the role of relationship quality on loyalty in the era of digital transformation.

The rapidly changing business climate and competition that has been getting stricter demand companies to have a proper strategy to grow and sustain their business. The objective of this quantitative study is to analyze the benefits of innovation in business strategy to create a competitive advantage for micro, small and medium enterprises (MSME). Inferential statistical analysis was performed on three mediating variables: people innovation, process innovation, and product innovation, in their involvement in business strategies as an independent variable, against competitive advantage as a dependent variable. Twenty-nine MSMEs in Indonesia were used as a sample of this study to examine four hypotheses. Thirty indicators of five variables were transformed into 50 questions in a Likert-scale questionnaire distributed to selected respondents using purposive sampling. The results of the T-test show that business strategy has a significant effect on competitive advantage, which means that business strategy without innovations creates only 20.2% of its competitive advantage. On the other hand, Sobel test results demonstrate that innovations significantly mediate the influence of business strategies on companies’ competitive advantages. Finally, product innovation potentially increases the competitive advantages by 53.1%, followed by process innovation and people innovation by 47.2% and 44.5%. AcknowledgmentThe author would like to express special gratitude to the Department of Industrial Engineering at Universitas Kristen Krida Wacana, who supported this investigation, as well as all participating MSMEs. This study received no specific grant from any funding agency in the public, commercial, or not-for-profit sectors.

Micro, Small, and Medium Enterprises (MSMEs) are vital to Indonesia economy, yet many face challenges in adapting to the digital era. This study examines the impact of market orientation on business performance, with digital literacy as a potential mediator, focusing on MSMEs in Surabaya, Indonesia. Using a quantitative approach, Structural Equation Modeling (SEM) with WarpPLS was employed to analyze data from 70 MSME owners collected through questionnaires. The results demonstrate that market orientation significantly influences both digital literacy and business performance. However, digital literacy does not mediate the relationship between market orientation and business performance, suggesting that its role is direct rather than intermediary. These findings highlight the critical importance of market-oriented strategies in driving MSME success and underline the necessity for improved digital literacy to enhance competitive advantage. MSME managers are encouraged to adopt structured customer feedback mechanisms, invest in digital training programs, and leverage market monitoring tools to better adapt to dynamic market demands. By integrating market orientation with advanced digital practices, MSMEs can achieve sustainable growth and improved operational efficiency. Future research should explore other potential mediators, such as innovation capacity or organizational culture, to better understand the dynamics of MSME performance. This study provides valuable insights into how MSMEs in mid-tier urban centers can thrive in the digital era, contributing to broader discussions on entrepreneurship and digital transformation in developing economies.

The effective use of digital technology and disruptive innovations are increasingly shaping the way companies survive in today’s markets. Consequently, the need for German Small and Medium Enterprises (SMEs) to perform a digital transformation, which implies the creation of a new business model through sophisticated technologies, is gaining significance for succeeding in the digital age. While most German SMEs have already accomplished a digitization of their collaboration and communication,a profound digital transformation is still imminent for the majority. Based on the investigation of existing literature on the subject, this paper demonstrates the suitability of design thinking methods to develop strategic thrust for a digital transformation. The key potential of design thinking is rooted in its ability to creatively solve problems and reinforce skills needed to address dynamic environments. An exemplary result of using design thinking to develop strategic thrust is presented with the fictional business model GreenCube. The concept aims to assist German SMEs in performing a digital transformation by simplifying the incorporation of sophisticated digital technologies and providing opportunities for networking and thus integrating into an ecosystem. Despite their potential, design thinking activities involve several challenges including the incongruence of pre-defined specifications and designed concepts, the gap between a focus on time-reduction and a focus on experimentation, and the lack of measurability of design thinking gains. Nevertheless, the nature of businesses’internal and external environment is becoming ever more fast-paced, making the ability to manage change increasingly critical for German SMEs to establish competitive advantage.

This study aims to analyze the role of digital technology in the development of Small and Medium Enterprises (SMEs) in Tidung, Makassar. In today's digital era, the adoption of digital technologies such as online marketing, e-commerce, and social media has become a crucial factor in driving the growth of SMEs, improving operational efficiency, expanding market reach, and fostering product and service innovation. This research employs a descriptive qualitative approach to deeply understand the utilization of digital technology by SMEs in Tidung, focusing on the benefits gained and the challenges faced in the digitalization process. The findings reveal that although SMEs in Tidung experience significant benefits from adopting digital technologies, such as increased market visibility and operational efficiency, challenges such as limited resources, infrastructure, and low digital literacy remain major obstacles. Therefore, enhancing digital literacy and improving infrastructure support are necessary to accelerate digitalization among SMEs. This study is expected to provide valuable insights for policymakers and SME practitioners to optimize the use of digital technology to achieve sustainable growth and enhance their contribution to the local and national economy.

This study investigates the dynamic capabilities (DCs) and competitive advantage of South African small and medium enterprises (SMEs). DCs are organisational processes purposefully designed to alter the “firm’s resource base” in other to achieve competitive advantage in a rapidly changing environment. DCs govern a firm’s “valuable, rare, inimitable and non-substitutable” organisational resources. Research has shown that South African SMEs contribute approximately 35% to the national gross domestic product. SMEs are significant in their contributions to economic growth, innovation of new products, technological progress and competitive advantage. However, most SMEs are confronted with challenges such as; changes in technologies, innovative products, customer demands, and the desire to remain flexible. SMEs are often faced with competitive forces which threaten their survival. The failure rate of SMEs is much higher than that of largerorganisations. South African SMEs fail at a rate of between 70 and 80%. SMEs need DCs to achieve competitive advantage in fast changing business environments. Research on DC has been on a piecemeal basis. An empirical research on SMEs’ DC from a developing countries context has not received wide attention. Through an online based survey of South African SMEs, our paper provides an insight into the types of organisational capabilities or DCs that can lead to competitive advantage within the SMEs. The statistical findings clarify the notion that DCs alone cannot lead to competitive advantage. It was found that sensing, integrative and behavioural capabilities are part of DC constructs: this study extends the used four DC constructs (absorptive, adaptive, innovative and networking capabilities) to include sensing, integrative and behavioural capabilities. The findings show DCs have significant impacts on competitive advantage, and are capable of influencing SMEs’ valuable, rare, inimitable and non-substitutable (VRIN) resources to achieve competitive advantage in a fast changing business environment. Key words: Competitive advantage, dynamic capability, small and medium enterprises.

This study aims to evaluate the influence of government policies and service quality on the competitive advantage of Micro, Small, and Medium Enterprises (MSMEs) through the mediation role of product innovation in Kediri City. The study used a quantitative approach, collecting data through questionnaires distributed to 85 MSME actors who are members of the Indonesian Conveyance Entrepreneurs Association (IPHI) DPC Kediri City. Data analysis was conducted using the Partial Least Squares (PLS) method to test the relationships among variables in the research model. The study's results indicate that product innovation plays an important role in building MSMEs' competitive advantage. Government policies and service quality affect product innovation, but neither shows a significant direct effect on competitive advantage. Product innovation has been shown to mediate the relationship between service quality and competitive advantage, whereas the mediation role in the relationship between government policies and competitive advantage remains limited. These findings indicate that product innovation is a strategic element that needs to be strengthened to enhance MSME competitiveness. Therefore, policy support and improving service quality need to be directed to encourage the creation of relevant and sustainable innovations in the MSME sector.