Abstract
The purpose of this study is to examine and analyze the influence of: (1) internal environment, external environment, business ethics, entrepreneurial orientation on differentiation strategies; (2) internal environment, external environment, business ethics, entrepreneurial orientation, differentiation strategies on competitive advantage; (3) internal environment, external environment, business ethics, entrepreneurial orientation, differentiation strategies, competitive advantage on business performance. This research is an explanatory type of research with a quantitative approach. The populations in this study were all Small Industries in Surabaya as many as 384 Small Industries in Surabaya, while the samples used were 349 Small Industries in Surabaya. Data collection is done by questionnaire. The data analysis technique used is the Structural Equation Model (SEM) with AMOS program. Based on the results of the analysis shows that: (1) internal environment, external environment, business ethics, entrepreneurial orientation significantly influences on differentiation strategy; (2) business ethics, entrepreneurial orientation, differentiation strategy has a significant influences on competitive advantage, while internal environment and external environment does not have a significant influences on competitive advantage; (3) internal environment, entrepreneurial orientation, differentiation strategies, competitive advantage has a significant influences on the performance of small industries, while external environment and business ethics has no significant influences on the performance of small industries.
Highlights
The existence of Small Industries in Indonesia today continues increasing and developing rapidly
The research results conducted by Nurlina cs (2013) researched internal environmental influences toward differentiation strategies in Ornamental Plant Micro Business in Denpasar City and the results show that there are influences of internal environmental variables toward differentiation strategies
The research results conducted by Anggraini and Sukaatmadja (2015) who researched in culinary industry in Denpasar City, the results prove that differentiation strategies influence positively and significantly toward culinary industrial performance improvement in Denpasar City
Summary
The existence of Small Industries in Indonesia today continues increasing and developing rapidly. Vol., Issue 1, Jan-2020 middle of weakening global economics that strikes Indonesia today, Small Industries are hardly influenced and the growths are relatively stable (Gunawan, 2016). Statistical Center Office noted, the small industrial growths along 2017 were in the number of 4.74 percents. The growths were the lowest since 2013 ago, in which in 2013, small industries had chances to grow 7.51 percents, they decreased in 2015 as 5.71 percents, and they returned to increase in 2016 but only as 5.78 percents (Gumelar, 2018). Small industries in East Java slightly showed significant development, seen from decreases from 2013 as 89,786 units to be 39,932 units in 2014 and they increased in 2015 but insignificantly
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