Coffee Shop SMEs’ Competitive Advantage: The Role of Entrepreneurial Competence and Business Networks
DOI:
https://doi.org/10.25186/.v21i.2461Abstract
Although SMEs drive job creation and national sectoral growth, coffee shop SMEs in Indonesia continue to face intense competition that challenges their sustainable advantage. Based on the Resource-Based View and Relational View, this study proposes that innovation capability is an important mechanism that transforms entrepreneurial competence and business networks into competitive advantage. Using survey data from 250 independent coffee shop SMEs in 5 major cities in Indonesia, we applied structural equation modeling (SEM) to test the direct and mediated paths among these constructs. The results indicate that entrepreneurial competence and business networks each have a significant direct effect on competitive advantage, as well as a strong positive effect on innovation capability. Innovation capability ultimately serves as a strong predictor of competitive advantage. Mediation analysis shows that the indirect effects of entrepreneurial competence and business networks through innovation capability exceed the direct effects, indicating that innovation capability plays a crucial role in achieving a superior market position. These findings suggest that SME policies and managerial interventions should prioritize the development of capabilities for product/process/marketing innovation and targeted networks (relationships with suppliers, local coffee communities, and digital platforms) to achieve sustainable competitive advantage.
Key words: Independent beverage ventures; Innovation capability development; Strategic interfirm relationships; Market differentiation strategy; Resource-based strategic management.
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