The effect of strategic planning on competitive advantages of small and medium enterprises

Abstract

This research starts from a phenomenon that indicates that the competitive advantage of Small and Medium Enterprises (SMEs) in increasingly fierce business competition has not yet achieved in Sukabumi, Indonesia. This is indicated by the inefficiency of production costs felt by SMEs which are not capable of creating competitive prices and the difficulty of making unique products. The purpose of this study is to determine the magnitude of the influence of dimensional strategic planning on the competitive advantage of SMEs. The results of the analysis and discussion are expected to find a concept regarding SME strategic planning. This study uses a quantitative approach, with an explanatory survey design that explains and describes the level of influence of strategic planning on the competitive advantage of SMEs in Sukabumi Regency, Indonesia. By using data analysis of Structural Equation Modeling (SEM), the results of the study indicate that there is a significant influence of strategic plan-ning on the competitive advantage of SMEs in Sukabumi, Indonesia. Strategic planning which consists of three dimensions, namely: the desires of external stakeholder, the company's internal encouragement, and the company's database, significantly influences the competitive advantage of SMEs. Of the three dimensions of strategic planning, the dimensions of external stakeholder have the highest influence, while the company's database have the lowest effect. These results practically imply for SMEs to increase the consideration of company database in preparing the SME strategic planning.

Keywords

• strategic planning
• competitive advantage
• smes
• cost leadership