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All Journal International Journal of Economics Development Research (IJEDR)
Lailaturrahmah MD , Khoirunnisa
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Economics, Econometrics & Finance Social Sciences

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Driving Economic Competitiveness through Innovation and Differentiation Strategies Lailaturrahmah MD , Khoirunnisa; Danial, R Deni Muhammad; Zafar, Tetty Sufianty
International Journal of Economics Development Research (IJEDR) Vol. 6 No. 4 (2025): International Journal of Economics Development Research (IJEDR)
Publisher : Yayasan Riset dan Pengembangan Intelektual

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.37385/ijedr.v6i4.8070

Abstract

This study investigates the influence of innovation capability on competitive advantage, with differentiation strategy as a mediating variable, among Micro, Small, and Medium Enterprises (MSMEs) engaged in the early morning snack market at Toserba Selamat, Sukabumi City. Employing a quantitative research design, data were collected from 270 MSME respondents using a structured questionnaire. The analysis was conducted using Structural Equation Modeling (SEM) with the assistance of AMOS software. The findings reveal that innovation capability has a significant positive effect on both differentiation strategy and competitive advantage. Additionally, differentiation strategy plays a mediating role in strengthening the impact of innovation capability on competitive advantage. These results highlight the importance of fostering innovation among MSMEs, not only as a means of adapting to dynamic market conditions but also as a strategic foundation for creating distinctive offerings that enhance market competitiveness. The study provides practical implications for MSME development through innovation-driven differentiation strategies.
Co-Authors R Deni Muhammad Danial Zafar, Tetty Sufianty