Development Model of Cacao Agro-Industry with Sectoral Competitive Advantage Based in Southeast Sulawesi, Indonesia

Abstract

The aim of this research was to explore the development model of cacao industry with sectoral competitive advantage. More specifically, the purposes of this research were to examine and explain the effects of market orientation, supply chain flexibility and strategic location toward competitive advantage in cacao agro-industry. Design used in this research was explanatory research with process of data collection through survey method by using questionnaire. Unit analysis of this research was leaders/managers of cacao industry. Data analysis method used is the generalized structured component analysis. Findings of this research show that market orientation and strategic location have positive effect and significant toward competitive advantage. But, supply chain flexibility has no significant effect towards competitive advantage. Furthermore, control variable of institutional economic has positive and significant effect towards competitive advantage. Practical implication can give understanding and information for managers of cacao industry in implementing their market orientation, supply chain flexibility and market strategy by assessing the ability of partner supply chain to respond market changes in obtaining and maintaining the competitive advantage. Limitation of this study is that in delivering the analysis, analysis relation of cross sectional was limited to respondents, manager/leaders only. Further researches need to involve cacao farmers, customers, government and business partners in the sampling. Besides that, commodity which was focused was very specific that is cacao industry. Therefore, put in concern about factors of season and farmers involvement need to get serious attention. Originality of this research can prove and explain integration of conceptual model in structural relation among market orientation, strategic location, and supply chain flexibility in improving competitive advantage. Furthermore, this research also gives empirical evidence of the role of variable control of institutional economic has significant effect towards competitive advantage.