MSME Business Performance: The Role of Competitive Advantage, Supply Chain Management Practices and Innovation

Abstract

To obtain business performance that can maintain business continuity, MSMEs must build supply chain management, competitive advantage, and innovation in running their business to get and improve business performance. This study seeks empirical evidence on how supply chain management, competitive advantage, and innovation can create a good business performance for MSMEs. This study uses a quantitative approach using a questionnaire as a data collection tool. The population of this research is Snack Food SMEs assisted by the Department of Trade, Cooperatives, and SMEs of Padang City, with a total sample of (10 X Indicator = 180). Of the 180 questionnaires distributed, returned only 155, so the research response rate was 86.11%. Questionnaires that can be used in data analysis are 130 questionnaires, or 83.87% of the returned questionnaires. The data that has been collected was analyzed using a multiple regression analysis approach with SPSS software. The results show that (1) business performance is significantly affected by competitive advantage, (2) SCM Practices significant effect on business performance, and (3) innovation has a significant effect on business performance. In Padang City snack SMEs, competitive advantage, SCM Practices and innovation have an influence of 87.7% on MSME business performance. The results show that MSMEs that want good business performance must be able to apply supply chain management practices, create innovation, and have a competitive advantage in the market.