Abstract
This study aims to examine the relationship between strategic orientation, innovation, and competitive advantage in SMEs in Central Java. During the pandemic, market conditions were not stable enough but still urged SMEs to grow and develop through competitive advantage. This study wants to see how strategic orientation affects the innovation process of SMEs to create a competitive advantage. Respondents were 78 SMEs spread across Central Java. Data analysis used validity test, reliability test, correlation, multiple regression, T-test, F test, and coefficient of determination test. Tests were conducted between strategic orientation towards innovation and strategic orientation to competitive advantage. The strategic orientation carried out during the pandemic is quite difficult to increase innovation and competitive advantage.
Highlights
To deal with the turbulence due to the COVID-19 pandemic, companies are faced with their strategic capabilities to survive
The orientation reflects the strategic direction applied by the company to create appropriate behaviors that lead to superior performance (Gatignon & Xuereb, 1997; Slater, Olson, & Hult, 2006), and encourage the creation of innovation (Grawe et al, 2009; Laforet, 2009). , 2009; Theodosiou et al, 2012)
That this insignificant relationship leads to a learning orientation variable that does not have a big impact on competitive advantage, The second test was carried out on the strategic orientation variable with the dimensions of market orientation, entrepreneurial orientation, learning orientation to innovation
Summary
To deal with the turbulence due to the COVID-19 pandemic, companies are faced with their strategic capabilities to survive. There are not many studies that examine the orientation from the point of view of knowledge (Hakala, 2011) For this reason, this study tries to complement another important strategic orientation in the context of knowledge to increase competitive advantage (Sinkula et al, 1997), namely learning orientation. To complement the previous research, the conceptual framework developed is to develop competitive advantage through strategic orientation for the creation of innovation in the creative industry in Central Java. The results of the 2020 survey, 98 percent of creative industry players were affected by COVID-19, 67 percent of sales declines, 58 percent of project cancellations, but 8 percent of the increased turnover (Cahyono, 2021) For this reason, the main contribution of this research is JEFMS, Volume 5 Issue 03 March 2022 www.ijefm.co.in aimed at exploring the strategic orientation of the creative industry to increase competitive advantage through the creation of innovation
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