Analysis of the Mediation Effect of Innovation Culture on the Effect of Entrepreneurial Orientation on the Sustainable Competitive Advantage of SMEs in Indonesia

Abstract

One of the opportunities for an entrepreneur is to assess the market and expand the business to the global market.Often, the domestic market experiences a downturn which has a negative impact on business operations and sales.When the business goes global, this minimizes the risk of a market downturn due to other options.There is always an opportunity to take advantage of the global position to protect the business and gain new market share.One alternative to protect and improve business performance is to increase sustainable competitive advantage.However, to achieve optimal sustainable competitive advantage, the role of entrepreneurial orientation and culture is needed to innovate sustainably.The main purpose of this study is to analyze the effect of entrepreneurial orientation and innovation culture on the sustainable competitive advantage of SMEs.This study uses a causal quantitative research design.The number of samples used in this study was 170 SME business actors.The data analysis method used is Partial Least Square (PLS).The data analysis test tool uses the statistical software Smartpls 3.0.The results of this study conclude that entrepreneurial orientation and innovation culture have a positive and significant effect on sustainable competitive advantage.The results also confirm that the innovation culture can mediate the relationship between entrepreneurial orientation and sustainable competitive advantage.

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