The competitive strategy of the village unit cooperative: Capability and innovation performance towards competitive advantage

Abstract

Dynamic capabilities can explain competitive advantage (Pisano, 2017; Teece et al., 1997). And superior business strategies are generally based on innovation (Hacklin et al., 2018). This study aims to examine the role of adaptive creative capabilities in the relationship between dynamic capabilities and innovation performance on competitive advantage. The sample consists of 106 units of analysis. The method used is to test the model and hypotheses using partial least squares-structural equation modeling (PLS-SEM). The results of the study show that dynamic capabilities have a positive effect on competitive advantage, innovation performance and adaptive creative capabilities. In addition, adaptive creative capability has a positive effect on innovation performance, but adaptive creative capability has no effect on competitive advantage. In addition, innovation performance has a positive effect on competitive advantage. The limitation of the research is village unit cooperatives (VUC) in 12 districts of East Java Province, Indonesia. This research is the first model to investigate the role of dynamic capabilities, adaptive creative capabilities, and innovation performance on competitive advantage in the Southeast Asian region, especially Indonesia. This study contributes to the literature on VUC management practices. VUC must encourage the effectiveness of dynamic capabilities, adaptive creative capabilities and innovation performance to achieve better competitive advantage.