Increasing the competitive advantage and the performance of SMEs using entrepreneurial marketing architectural innovation capability in North Sumatera, Indonesia

Abstract

The aim of this study is to analyze how to improve the competitive advantage and performance of small and medium-sized enterprises (SMEs) in North Sumatra through marketing entrepreneurship and architectural innovation capabilities. The type of research is quantitative research. The study focused on UMKM in North Sumatra who offered the following categories of products: handicrafts, food and beverages, coffee shops, bakeries, fashion, clothing, and services. The research population consists of all 84,758 UMKMs in North Sumatra. As for the sample number ranging between 100 and 200, or at least 5 times the number of variable indicators, when using Structural Equation Modeling (SEM). The entire sample size for stage 1 was 102 SME samples from Medan city. To analyze the research data, the study used SmartPLS (Partial Least Squares). The findings of this study show that market orientation (MO) has a negative and insignificant impact on SME performance from data processing and hypothesis testing results. Entrepreneurship Marketing Architecture Innovation Capacity (EMAIC) has a beneficial and significant impact on Competitive Advantage (CA). The ability of Enterprise Marketing Architectures (EMAC) to innovate has a significant and beneficial impact on their success. Entrepreneurship orientation (EO) provides tangible proof of SME success through competitive advantage (CA). Corporate orientation has no direct impact on SME performance through competitiveness (CA).