A Competitive Strategy Quality System of SME’s Handicraft Products in a Development Country (Study in Central Java Province, Indonesia)

Abstract

SMEs in developing countries often face the problem of the policy determining the competitive strategy quality system to develop business performance. Analyzing how to improve the performance of handicraft SMEs within the context of the effect of the competitive strategy and quality system of SMEs is required to address the issues raised above. Thus, a research model was developed using four research variables: strategic asset quality, adaptability, the entrepreneurial orientation of SME owners, and competitive strategy quality. Data regarding the variables studied used a structured questionnaire so that the structured statements in the questionnaire were able to answer the research variables, which 110 handicraft owners then answered in Central Java Province, Indonesia. Following the collection of the data, the structural equation modeling (SEM) method was used to analyze it. The model created for this study is a fit, according to the findings of the model testing. The competitive strategy quality system is positively and significantly impacted by the analytical findings about the role of strategic asset quality, environmental adaptability, and entrepreneurial orientation. According to the results of the hypothesis, enhancing the capability of asset quality indicators and the company's environmental adaptability may be used to improve the competitive strategy quality system of the Handicraft Product Small Business Group in Central Java Province, Indonesia.