THE INFLUENCE OF PRODUCT INNOVATION, MARKET ORIENTATION AND ORGANIZATIONAL CULTURE ON BUSSINESS PERFORMANCE WITH THE COMPETITIVE ADVANTAGE AS INTERVENING VARIABLE: EMPIRICAL STUDY OF AGRICULTURAL CREATIVE INDUSTRY MSMES AT BOJONEGORO REGENCY OF EAST JAVA, INDONESIA

Abstract

This study is intended to analyze the effect of Product Innovation, Market Orientation and Organizational Culture on Business Performance with Competitive Advantage intervening variable. The research, which was conducted in Bojonegoro Regency, East Java, involved entrepreneurs in the creative industries of agriculture, craft and culinary. Methodology, the method of collecting data is by interviewing and distributing questionnaires to 100 business actors using the Probability Sampling technique with a systemic random sampling system. The results of the questionnaire answers are given a scale according to the Likert Scale with a score of 1-5. Furthermore, the data were analyzed using SEM calculations with SmartPLS version 3.0 software. The data were analyzed by Influence Analysis with the Measurement Model (Outer Model) and Structural Model (Inner Model). The results of the study: Product Innovation variable has no significant effect on business performance. But Product Innovation has a higher level of influence on Business Performance if it is driven by the intervening variable of competitive advantage, although the results are positive but not significant. The Market Orientation variable has no significant effect on business performance directly or after being driven by the competitive advantage variable. It even results in a smaller value. Organizational culture has a positive and significant direct effect on business performance without being driven by the intervening variable Competitive advantage. If it involves Competitive Advantage Intervening Variables, it produces a negative relationship. From the results obtained, the Government of Bojonegoro Regency is expected to be even more aggressive in efforts to empower MSMEs in the Agricultural Creative Industry. So that in the future these SMEs can play a more significant role in turning the wheels of the economy in Bojonegoro Regency.

Keywords

• product innovation
• market orientation
• organizational culture
• competitive advantage
• business performance