Innovation Using Islamic Values as Sustainable Competitive Advantage: Case study on Muslim Clothing MSMEs

Abstract

This study explored how innovation using the approach of Islamic values was implemented among Muslim clothing MSMEs to gain a sustainable competitive advantage. The study employs qualitative case study. Data were obtained through observation, interviews and focus group discussions (FGD). Data were obtained from MSMEs in 4 cities in Indonesia, namely: Jakarta, Bandung, Depok and Tasikmalaya. The study found that all MSMEs in Muslim clothing involved in the study implement fundamental values and Islamic principles in business. The application of these values continues in the Covid-19 pandemic. This effort is considered as part of the innovations made to boost the competitiveness of the business in the market. Thus, Islamic values provide the foundation and guidance for Muslim clothing MSME owners in creating sustainable competitive advantage. This study was limited to MSMEs in Muslim Clothes business owners. It did not cover the fulfillment of criteria for fundamental values and Islamic principles on the supplier and retailer of the raw materials for Muslim clothing. Hence, it is suggested that study of innovation based on Islamic values on the supplier, retailer, producer, and distribution channels for raw materials can be carried out for further future research plan.