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Quality Festival 2023
ISBN 978-86-6335-104-2
Corresponding author: Dodi Setiawan Riatmaja
1881
Dodi Setiawan
Riatmaja 1
Syahrial Shaddiq
THE EFFECT OF HUMAN RESOURCE
COMPETENCE AND INNOVATION ON
EMPLOYEE COMPETITIVE
ADVANTAGES:
AN EMPIRICAL STUDY IN SMALL
MEDIUM ENTERPRISE
Abstract: The purpose of this research is to understand the
impact of human resource (HR) and innovation skills on
competitive advantage at small medium enterprise (SME) in
Yogyakarta, with entrepreneurial marketing as a moderating
variable. This study uses a quantitative survey method. In
Yogyakarta, 120 SME entrepreneurs were randomly selected.
Sampling through non-probabilistic techniques using a
criteria-based approach. The collected data was then
analyzed using structural equation modelling (SEM) with the
help of the Smart Partial Least Square (PLS) application. The
research findings show that small doses of HR expertise and
entrepreneurial marketing have a significant positive impact
on competitive advantage, whereas innovation does not have
such an effect. Marketing innovation and HR expertise have a
huge impact on start-up businesses. Finally, evidence
suggests that innovative marketing and entrepreneurship can
bridge the gap between HR expertise and competitive
advantage.
Keywords: Entrepreneurial Marketing, Human Resource
1. Introduction
As a consequence of the growth of the
industrial sector, the business world is
experiencing an increasingly fierce level of
competition (Eggers, et.al, 2018). This
situation has the potential to open many
doors, but in the long run it will also lead to
increased business competition (Muhammad
et al., 2019). As a result, it is very clear that
businesses need to have a sole competitive
advantage in order to survive and thrive in
the current market climate. Cultivating
competitive advantage is one of the key
strategies by which companies can survive in
the face of intense competition in the market
(Naidoo, 2020). Competitive advantage is
self-confidence that comes from
understanding that one's organization has
superior resources and a higher level of
productivity compared to other businesses
operating in the same industry (Ektebang &
Eniola, 2018).
There are several factors that influence
competitive advantage in a business,
including market orientation, product
innovation, environmental adaptability,
entrepreneurial orientation, training and
market orientation, and management
capabilities (Wahyudin, 2015); (Satria &
Sulisyawati, 2018). (Satria & Sulisyawati,
2018). As SMEs play such an important role
Email: dodi@amikom.ac.id
Competence, Innovation and Competitive Advantage.
1882
in the Indonesian economy as a whole, the
government is currently focusing a lot of
attention on the country's small and medium
enterprise sector (SME). The non-migration
processing economy sector saw the largest
increase in GDP investment, with the food
and beverage industry providing up to 36.4%
of the investment. The economic sector saw
the greatest growth in SME investment (Edi,
2021).
To be successful in today's increasingly
competitive marketplace, business owners
need to work more diligently than ever
before to develop cutting-edge innovations
that will assist them in maintaining and
improving the quality of their products and
services without compromising their ability
to turn a profit. In addition to the quality of
the product itself, the improvement of the
quality of customer service must be
examined. Accurate descriptions are
necessary due to the convenience of ordering
and receiving food and beverages online, as
well as the wide variety of goods and
services available. To find a solution to this
problem, you need an all-encompassing
marketing strategy that incorporates
entrepreneurial characteristics. Becherer
(2017), Hidayatullah et al. (2019), and the
work of others should be followed as a guide
According to (Morrish, et.al, 2017)
entrepreneurial marketing is helping
proactively and taking advantage of
opportunities to buy and retain customers
who have subscribed and are profitable with
innovative approaches in managing risk,
using human resources and creating
corporate value. According to Green's (2018)
examination of target markets, modern
consumers are more likely to consider their
sentiments, desires and imaginations when
making purchasing decisions, whereas in the
past they were more inclined to base their
decisions on rational factors. [citation
needed] As a direct consequence of this, the
marketing approach needed to be revised.
Contemporary marketing tactics place
greater emphasis on visual intuition while
paying attention to words, in contrast to
earlier marketing strategies which placed
greater emphasis on analysis, words and
numbers. As a result, it is not surprising that
many Indonesians choose to eat outside the
home given the country's alluring cuisine,
fashionable dining locations, and
Instagrammable food (Jones, 2017). In the
complex modern world, companies must be
able to apply creative marketing techniques
to achieve their goals in a more timely and
more effective manner.
A company's ability to successfully market
its products is critical to a company's success
because it makes those goods more available
to people who might be interested in buying
them. It is this marketing strategy that will
ultimately determine how successful the
marketing of a product is because it is this
strategy that will consistently build and
maintain client demand in the long term. It is
very important, when sales of a particular
product start to grow above expectations, to
identify whether this is due to inefficient
marketing methods or whether or not this is
due to changing consumer tastes and
expectations.
It is very important to have knowledgeable
HR professionals to carry out the
responsibilities required to gain a
competitive advantage. Alajmi (2016),
Mitchelmore (2017), and Nemli (2018) all
agree that HR is an important component of
a company's most valuable asset. In the
enterprise system, the success or failure of
the company's goals is determined, and the
company. need to pay more attention. It is
not enough for organizations to simply
identify the perfect employee for the
position; instead, each candidate must
possess the requisite abilities.
The marketing process used by SMEs is
related to human resources in a number of
ways. According to Alajmi, having skills in
HR may be beneficial for entrepreneurial
(Mahrous, et al., 2020).
1883
marketing (2016). The contribution of an
organization's human resources is one of the
most important factors in determining how
effective a program will be. The sustainable
success of a company depends on access to
human resources who are able to think
creatively and analytically. Because of these
characteristics, companies can more quickly
manufacture goods tailored to customer
needs and preferences.
In achieving competitive advantage through
HR expertise, innovation plays an important
role. Innovating is essential for those with
their own businesses, and fresh concepts are
essential for the kinds of forward-thinking
marketing methods entrepreneurs typically
use. Researchers Afriye (2019), Miles
(2016), and Morrish (2017) all agree that
company-led innovation can have an impact
on the marketing strategies used by SMEs.
To be successful in today's turbulent
economic environment, companies that want
to stay in business need to improve their
marketing skills, broaden their customer
base, and increase their sales and revenues to
compete with more established businesses.
It seems that the market is becoming more
and more significant in today's increasingly
competitive environment. Companies are
under increasing pressure from customers
with rapidly changing wants and must be
agile enough to keep up with the times by
implementing various innovations that keep
up with the changing nature of business.
Customers place this pressure on businesses,
which are already under increasing pressure
from customers with rapidly changing wants
and needs. One reason is that clients have
varying demands at different points in time;
consequently, they may choose to purchase
products from other companies if they are
not sure that one business can meet all of
their requirements. Therefore, for businesses
to continue to achieve their goals, they need
cutting-edge innovation. Innovation has the
potential to impact every aspect of a
company, including the way its merchandise
is marketed.
Production techniques, product presentation
and marketing strategies all have the
potential to be changed by innovation.
Customers examine not only the final value
of the product and the benefits they will
derive from its use when deciding whether to
make a purchase or not, but also whether or
not the price of the product is competitive
with other comparable items. Research
conducted by Chang (2017), Dereli (2015),
Le & Lei (2018), Mathenge (2018),
Varadarajan (2019), and Udriyah (2019)
shows that company innovation has the
potential to increase a company's advantage
over its competitors. By providing creative
innovation, it is hoped that the company will
be able to provide goods that are different
from those produced by other companies in
the past and offer advantages that exceed
what is offered by goods on the market
today.
Enhancing a company's competitive
advantage requires a large amount of HR
expertise as well as new capabilities.
Sandiku Dushi (2019) claims in a recent
essay that entrepreneurial marketing is a
realistic strategy for small and medium
enterprises (SMEs) due to the fact that the
majority of SMEs have limited resources
and, as a result, need to be creative in order
to be successful. There is great hope placed
on marketing SMEs as it is anticipated that
they will be able to gain a competitive
advantage through leveraging HR
knowledge and new solutions.
Findings from a number of studies that focus
on market orientation have led researchers to
the conclusion that market orientation has a
considerable influence on business
performance across various measures of
growth, sales, and profitability (Long, 2018).
A strong market orientation also requires a
strong level of motivation to seek new
opportunities and markets, which has a
major influence on market orientation
(Reijonen et al., 2017). Research conducted
1884
by Arafah (2018:8) shows that having a
strong focus on the market can greatly
improve a company's performance.
According to Mamun and dkk (2018: 133),
additional research was carried out with the
title "Effect of Entrepreneurial and Market
Orientation on Consumer Engagement and
Performance of Manufacturing SMEs". on
the level of consumer involvement and
manufacturing performance in small and
medium enterprises (SMEs) and resource
based view (RBV). According to the
research conclusion, customer participation
is the most important component, accounting
for 31% of the total, followed by an
emphasis on enterprise business (12.6%) and
market orientation (9.2%). According to Buli
(2017), in his research entitled
"Entrepreneurial Orientation, Market
Orientation and Performance of SME in The
Manufacturing Industry: Evidence from
Ethiopian Enterprises", empirical studies
claim that the success of small and medium
manufacturing enterprises (SMEs) is
strongly influenced by market orientation.
them, as much as 12 percent. Buli's research
was conducted on Ethiopian businesses.
Nonetheless, there is a contradiction between
these findings and research conducted by
Kajalo (2015) and Mahmoud (2018), both of
whom came to the conclusion that market
orientation has no significant correlation to
company performance.
These two authors found that the correlation
was weak. According to research conducted
by Anwar (2018: 998) entitled "Networking
and new venture's performance: mediating
role of competitive advantage," competitive
advantage acts as a powerful mediator
between financial intermediation and
business performance. Moreover,
competitive advantage acts as a powerful
mediator between business networks and
business performance. In addition, research
conducted by Asyhari (2018: 123) entitled
"The Role of Competitive Superior
Mediation on the Determinants of SME
Business Performance in Batik Weaving
Centers in Central Java" shows that the
ability of SMEs to generate competitive
advantage through differentiation, durability,
imitation, and cost competition is an
important factor in the realization of
business success.
This study intends to explore the effect of
HR capabilities and innovative thinking on
competitive advantage in SMEs in
Yogyakarta by using entrepreneurial
marketing as a moderating variable. The
results of previous research and the existence
of research gaps are the foundation of the
research objectives.
2.1 Entrepreneurial Marketing
Visionary marketing is a kind of marketing
strategy that is not predetermined and used
by business owners who have a broad vision,
according to Morris et al. (2018). Visionary
marketing is described as a type of
marketing strategy that is not predetermined.
Marketing on an entrepreneurial scale
requires adaptability in dealing with change,
openness to new concepts, concentration on
developing market potential, and capacity to
meet customer needs (Jones, 2017).
According to Carson (2017), SME sales are
truly the sales of the entire corporation.
Moore (2017) argues that the foundation of
effective entrepreneurial marketing consists
of four pillars: concepts, strategies,
techniques, and market intelligence.
According to Dushi (2019), entrepreneurial
marketing is one of the best strategies for
small and medium businesses because most
of these businesses have limited resources
and need to be creative to be successful. This
is why entrepreneurial marketing is one of
the best strategies for small and medium
businesses. According to Morris (2018), one
of the methods that can be used to build a
competitive advantage in the twenty-first
century is by adopting an entrepreneurial
2. Literature Review
1885
approach in marketing. This strategy can be
used to create new products or services that
are rated higher than competitors.
According to the findings of research
conducted by HidayatuIIah (2019) and
Mahrous (2020), commercial marketing
influences marketing performance by
influencing marketing performance measures
such as competitive advantage. Again,
research shows that entrepreneurial
marketing has an impact on the performance
of companies as well as their prominence in
the market (Mahrous, 2020). According to
Becherer's research, entrepreneurial
marketing does have an impact on the results
obtained in SMEs (2017).
According to findings published in 2019 by
Autio, entrepreneurial marketing and
innovation are inextricably linked in ways
that help each other. Agyapong (2017) found
the same results, showing that there is a
correlation between innovation and
marketing procedures carried out within the
company. A recent study (Afriye, 2019)
came to the conclusion that innovation in all
four categories (products/services,
processes/operations, organizational
structure/functions, and marketing) has a
major impact on a company's marketing
success. According to Morris (2018), there
are a total of twelve indicators for business
marketing, and they include the following:
proactiveness, risk taking while considering
potential consequences, attention to
opportunities, utilization of available
resources, customer focus, and value
creation.).
2.2 Competence of Human Resources
(HR)
Increasing productivity is one of the goals
that can be achieved through the use of
human resources in a company. The strategic
decision-making process (HR) is the engine
that drives an organization's efforts to
achieve or fulfill its vision and goals. The
process of developing skills in HR is
implemented throughout the organization,
starting with the recruitment stage and
continuing through to awarding. According
to Shahhosseini (2021), having HR
capabilities will make it easier to complete a
project, which will ultimately give the
organization an advantage in the market. HR
competence affects all aspects of the
company's operations, including the
marketing strategy it uses. According to
Franco (2018), for SME entrepreneurial
marketing efforts to be successful, the
human resources currently available must be
able to think creatively and not be fixated on
the marketing methods of large companies.
This is because SMEs have limited
resources, both in terms of human resources
and financial resources. HR in SMEs must
be able to respond to market opportunities
and needs, maintain consistency in
marketing university products, and be able to
communicate with a wider audience.
Adoption of HR practices has a positive and
statistically significant impact on a
company's competitive advantage, according
to research conducted by AIajmi (2016)
using data collected from employees in a
thousand one hundred and thirty
manufacturing companies. This data is
collected from employees in one thousand
one hundred and thirty manufacturing
companies. Improving one's skills in HR will
help the company to operate at a higher level
of efficiency, which in turn will result in
achieving better operational results. This
shows the need to use human resources in
every initiative undertaken by a company to
build a competitive advantage for itself.
NemII (2018) emphasized that HR
competency influences the company's
-
are indicators of HR competency, as stated
in (Gordon, 2017).
1886
2.3 Company Innovation
In order for a company to continue to
maintain its leading position in an
increasingly competitive business climate,
innovation is absolutely necessary for the
company's success. In order for a business to
innovate successfully, it must apply the new
concept as a whole in all of its activities
(CeyIan, 2018). The process of identifying
opportunities to produce goods, services, or
unique methods of doing business is referred
r
company's capacity to develop new products,
services and processes can have a major
impact on company performance and can be
considered an investment with a long-term
horizon (Andries, 2019).
Until 2016, Prajogo had completed research
on business creativity by interviewing 194
business managers in Australia. According
to recent research findings, technical
innovations brought by technology prove to
be more useful in helping businesses achieve
their goals. (AtaLay, 2019) conducted a
study of top-level managers in 113 Turkish
vehicle assembly companies in 2011 and
found results comparable to those findings.
The research results show that technological
innovation has a positive and significant
impact on business performance, regardless
of whether the impact is measured in the
form of outputs or processes. According to
Vaccaro (2020), a company's ability to
innovate in terms of features and functional
efficiency of its products can have a
considerable impact on a company's profit
and, as a result, on its ability to compete in
the market. market. According to CoIoson
(2020), innovation is an important
component of any marketing plan that can be
considered effective for entrepreneurial
ventures. Entrepreneurial marketing places
significant emphasis on change management,
opportunity analysis, and product
development as its three main areas of
concentration.
According to DereII (2015), effective
innovation management can generate a
competitive advantage for one's company.
As a result of the fact that the main goal of
innovation is to meet client demands, it is
widely recognized as a strategy that can help
companies gain an advantage over their
competitors. According to the findings of a
study conducted by Udriyah (2019) which
involved the participation of 150 SMEs in
SeIangor, market orientation and innovation
have an effect on competitive advantage.
Another researcher, Ie (2018), came to a
very similar conclusion. He observed that the
level of innovation in an organization can
affect its competitive advantage. Product
innovation, process innovation, marketing
innovation and organizational innovation are
the four types of innovation identified by the
OECD as indicators of innovation.
2.4 Competitive Advantage
When a business has a "competitive edge",
also known as an "advantage", it shows that
the business has a more prominent position
in its industry compared to its competitors
(Kumar & Pansari, 2018). If the company
has access to competent and unique sources
of strength, it is likely that the company will
have a competitive advantage in the market.
An organization's internal resources and its
position in the external market are the two
fundamental sources of strength that
determine a company's competitive
advantage. Hinterhuber (2019) confirms that
the most successful corporate strategy for
growing new competitive resources is the
most significant competitive advantage. In
the business world, every company is
constantly competing with each other to see
which one is the most successful in the
market. Every company has a strategy for
growth, and that strategy usually involves
delegating tasks to different departments to
maximize efficiency. Formulation of an
1887
effective strategy is very important for long-
term business continuity, because to
maintain market share, the strategy must be
able to provide a lasting competitive
advantage.
When a business consistently maintains a
market share that is in excess of what its
competitors have achieved, this is the best
demonstration of an organization's
competitive advantage. A large number of
different approaches to running a company
can be used to secure a long-term advantage
over the competition (Poter, 2017). The goal
of this tactic is to achieve significantly lower
operating costs than competing firms. As a
result, the focus of this tactic is on increasing
productivity. It is impossible to ignore the
fact that cost reduction represents greater
profit potential and greater capacity to
withstand the effects of price competition
(Zekiri & NedeIea, 2019). Whyudin (2015)
identifies market focus, product innovation,
and environmental flexibility as the three
main reasons for a company's capacity to
maintain a competitive advantage.
According to research by Satria and
SuIistyawati (2018), the factors that
determine a company's competitive
advantage include entrepreneurial
orientation, training, market focus, and
management skills. According to II (2018),
an organization's competitive advantage can
be broken down into several criteria, some of
which are price/cost, quality, delivery speed,
product innovation, and market time.
Given the theoretical work just discussed, a
further research framework can be
conceptualized as follows:
Figure 1. Research Concept Framework
The research method used in this research is
a quantitative survey. It seems that the actual
number of Yogyakarta residents who are
members of the SME is unknown, but the
population consists of these residents.
Variations in sampling are evaluated, and
sample size is determined based on the
smallest number of samples that will
produce valid results. When the standard
deviation is smaller than five, the number of
samples required is 120, as stated by Cooper
(2018). The methodology used to collect
samples is called non-probability sampling,
and uses a purposive sampling method. In
order to meet the minimum standard, a
company must have been in operation for at
least two years and generate an annual
revenue of at least IDR 2.3 million.
Standard questionnaires were distributed via
Google Form to SME students who are
members of several student organizations in
Yogyakarta to compile this information.
After the information is obtained, it is
evaluated with the help of the Smart PIS
program through the structural equation
model (SEM). According to the findings
(Gozali & Iatan, 2015), the following is an
overview of the data processing steps for this
particular study:
1. The Mode for Evaluating Success Called
the Staged Mode At this point, instruments
are put through their paces in the testing
3. Research Methods
1888
phase, where the accuracy and reliability of
various indications are evaluated. The
Staged Evaluation Framework is the first
instruction. At this point, the instruments
will live their step in the testing phase, where
many indicators will be evaluated for
accuracy and precision. An instrument is
said to be valid and reliable if its calculated
value is greater than its mean value at a
significance level of 0.05 and its Cronbach's
Alpha value is better than 0.6. second
literacies of the Test Phase structure modeI.
At this point in the hypothesis testing
procedure, the aim is to determine whether
the independent and dependent variables, as
measured by the Smart PIS mode, really
have a relationship that can be considered
statistically significant. The statistic known
as the r-squared coefficient is used to
determine the extent to which the variables
in the model are related to each other in
some way. After that, the estimation of the
radiant efficiency of the paving stones was
obtained by applying the bootstrapping
approach. If the t-statistic is greater than 1.96
and the p-value is less than 0.05, then the
result is considered statistically significant; if
the value of r is greater than r table at a
significance level of 0.05, then the result is
valid; and if Cronbach's Alpha value is
greater than 0.6, then the result is considered
reliable.
2. The evaluation of the structural model,
also known as a hypothesis, is the second
stage of testing. The purpose of this stage is
to determine, through the application of the
partial least squares statistical method,
whether the hypothesized relationships
between the various construct variables and
nodes are significant or not (PIS). The
statistic known as the r-squared coefficient is
used to determine the extent to which the
variables in the model are related to each
other in some way. After that, an estimated
line efficiency coefficient derived through
bootstrapping is displayed. The results were
considered statistically significant if the t-
statistic was greater than 1.96 at a
significance threshold of 0.05, while the beta
coefficient was used to indicate the direction
of influence. Staged Mode as a Means of
Evaluating Success At this stage, the
instrument will be tested for its capabilities,
in which various indicators will be evaluated
for accuracy and precision. An instrument is
said to be valid and reliable if its calculated
value is greater than its mean value at a
significance level of 0.05 and its Cronbach's
Alpha value is better than 0.6. The second
iteration of the Test Phase structure mode.
At this point in the hypothesis testing
procedure, the aim is to determine whether
the independent and dependent variables, as
measured by the Smart PIS mode, really
have a relationship that can be considered
statistically significant. The statistic known
as the r-squared coefficient is used to
determine the extent to which the variables
in the model are related to each other in
some way. After that, an estimated line
efficiency coefficient derived through
bootstrapping is displayed. The results were
considered statistically significant if the t-
statistic was greater than 1.96 at a
significance threshold of 0.05, while the beta
coefficient was used to indicate the direction
of influence.
4. Results
4.1. Output Test of Validity and
Reliability
The test was given to a total of 35 people
using the instrument. When the significance
criterion is set at 0.05 and the r-squared
statistic for table is 0.372, the instrument is
considered valid if the r-squared statistic is
higher than the r-squared statistic for table.
The reliability test can determine how
consistent the readings are from a measuring
instrument. Analysis whether the ranking is
consistent or not using Cronbach's AIpha.
Cronbach's aIpha value of more than 0.6
1889
indicates that the instrument has a high
degree of dependability.
All r product moment values are greater than
or equal to 0.372, which indicates that all
research items for all research variables are
valid. This conclusion is reached by
determining the extent to which the research
instrument can be relied upon. Since all
variables have a Cronbach's AIpha value
greater than 0.6, the entire set of variables
can be trusted.
4.2. Structural Analysis of the PLS
Equation Model
a. Outer Model Results
The convergence validity criterion requires
that each dimension in modeI meets a certain
threshold, which is defined as an absolute
loading factor greater than 0. If this is not
successful, the relevant dimension will be
removed from the modeI. The results of the
convergence test conducted to determine the
accuracy of the data are presented below.
Table 1. Output Convergent Validity
Indicator Entrepreneurial Marketing HR
Competence Innovation Competitive
Advantage
X1.1 0.830
X1.2 0.874
X1.3 0.842
X1.4 0.813
X1.5 0.885
X2.1 0.872
X2.2 0.884
X2.3 0.868
X2.4 0.757
Y1.1 0.817
Y1.2 0.749
Y1.3 0.753
Y1.4 0.732
Y1.5 0.781
Y1.6 0.827
Y2.1 0.875
Y2.2 0.859
Y2.3 0.756
SMARTPLS 3.0 Output Data Source by Researcher, 2023.
Table 1 shows that all dimensions have outer
loading > 0.700, so there are no dimensions
that need to be removed from mode I. The
results of convergent validity can also be
seen visually as shown in the figure 2.
Model measurements can also use AVE
(Average Variance Extracted) and CR
(Composite Reliability), and the following
are the results (table 2).
The recommended AVE value is > 0.5,
while the composite reliability value is > 0.7.
The AVE value obtained is above 0.5, this
means that the variance that can be explained
by the dimensions is above 50%.
Meanwhile, the composite reliability value >
0.7 means that all of the stable variables
have good reliability.
1890
Figure 2. Convergent Validity Model Results of SEM-PLS Entrepreneurial Marketing and
Competitive Advantage
Table 2. Results of Average Variance Extracted (AVE)
Variable Composite Reliability Average Variance Extracted
(AVE)
EntrepeneuriaI Marketing 0.895 0.593
HR Competence 0.912 0.714
Innovation 0.863 0.683
Competitive Advantage 0.934 0.728
SMARTPLS 3.0 Output Data Source by Researcher, 2023.
b. Inner Model Results
The following is the result of the analysis of
the coefficient of determination (R2) of the
inner mode.
Table 3. Value of the Coefficient of
Determination (R2) in the Inner Model
Variable R Square R Square
Adjusted
Entrepreneurial
Marketing 0.557 0.543
Competitive
Advantage 0.594 0.589
SMARTPLS 3.0 Output Data Source by Researcher,
2023.
The meanings that can be explained in table
3 are:
1. It has been determined that a value of
0.543 should be assigned to the determinant
coefficient for the final stage
entrepreneurship marketing variable. This
shows that human resources and inventive
talent can explain 54.3% of the variation in
entrepreneurial marketing, while other
factors outside the mode account for 45.7%
of the variation in entrepreneurial marketing.
1891
2. Second, the value of the competitive
advantage of the latent variable will always
be 0.589% regardless of other factors. This
suggests that HR competency orientation,
innovative marketing, and entrepreneurial
marketing may be responsible for 58.9% of
the variance in competitive advantage, while
out-of-mode factors are responsible for
41.1% of the variance.
Estimation of the path coefficient of the least
square model of entrepreneurial marketing
and competitive advantage is shown in table
4.
The results of a causal relationship between
latent variables are stated in the figure 3.
Table 4. Estimating Results of Partial Least Square Entrepreneurial Marketing Models and
Competitive Advantage
Information Original
Sample (O)
Standard
Deviation
T Statistics P Values
Entrepreneurial Marketing to
Competitive Advantage
0.392 0.115 3.312 0.001
Innovation towards Entrepreneurial
Marketing
0.263 0.096 2.636 0.008
Innovation towards Competitive
Advantage
0.053 0.102 0.569 0.567
HR Competence on Entrepreneurial
Marketing
0.557 0.107 5.342 0.000
HR Competence on Competitive
Advantage
0.394 0.125 3.123 0.003
SMARTPLS 3.0 Output Data Source by Researcher, 2023.
Figure 3. Results of SEM-PIS Entrepreneurial Marketing Modelling and Competitive
1892
Advantage. The estimation results of the
research model are as follows:
EM = 0.557 KS + 0.263 IS
KK = 0.394 KS + 0.053 IS + 0.392 EM
The structural equation can be explained as
follows:
a) The HR competency variable has a
significant positive effect on Entrepreneurial
Marketing (EM) with an estimated path
coefficient of 0.557 and a p-value of 0.000.
This means that the better the competence of
the HR (KS), the better the Entrepreneur
Marketing (EM).
b) The latent variable of innovation has a
significant positive effect on Entrepreneurial
Marketing (EM) with an estimated path
coefficient of 0.263 and a p-value of 0.008.
This means that the better the innovation
(IS), the better the Entrepreneurial
Marketing (EM).
c) The HR competency variable has a
significant positive effect on competitive
advantage with an estimated path coefficient
of 0.394 and a p-value of 0.003. This means
that the better the competence of human
resources, the higher the competitive
advantage (KK).
d) Innovative innovation variable (positive
but not significant effect on competitive
advantage with an estimated path coefficient
of 0.053 and a p-value of 0.567. This means
that the more innovative, the competitive
advantage will increase, but the increase that
occurs is not statistically significant.
e) Entrepreneurial Marketing Identification
Variable has a significant positive effect on
competitive advantage with an estimated
path coefficient of 0.392 and a p-value of
0.001. This means that the better the
entrepreneurial marketing (EM) is, the
higher the competitive advantage will be.
Table 5 below is used to see the indirect
effect of HR competence and innovation on
competitive advantage through
Entrepreneurial Marketing (EM).
Table 5. Indirect Effect
Information OriginaI
SampIe (O)
Standard
Deviation T Statistics P VaIues
Entrepreneurial
Marketing to
Competitive Advantage
Innovation towards
Entrepreneurial
Marketing
Innovation towards
Competitive Advantage 0.104 0.045 2.347 0.021
HR Competence on
Entrepreneurial
Marketing
HR Competence on
Competitive Advantage 0.216 0.090 2.413 0.012
Data Source SMART-PIS 3.0 Uutput by Researcher, 2023.
According to Table 5, it can be explained
that the indirect influence of HR competence
and innovation on competitive advantage
through entrepreneurial marketing.
a) The path coefficient of the indirect
influence of HR competence on competitive
advantage through entrepreneurial marketing
is 0.216 with a p-value of 0.012 (significant
at a level of 5%). The positive indirect path
1893
coefficient indicates that the higher the
competence of HR, the competitive
advantage will also increase mediated by
Entrepreneurial Marketing.
b) The path coefficient of the indirect effect
of innovation (IS) on competitive advantage
(KK) through entrepreneurial marketing is
0.104 with a p-value of 0.021 (significant at
a level of 5%). The positive indirect path
coefficient indicates that the better the
innovation, the competitive advantage will
also increase mediated by Entrepreneurial
Marketing.
5. Discussion
5.1. The Effect of Human Resource
Competence on Entrepreneurial
Marketing
Examination of the available data reveals
that HR capabilities have a constructive and
material influence on business expansion
through marketing. That is, the level of HR
expertise possessed by an entrepreneur will
be directly correlated with the quality of the
marketing efforts carried out by the
entrepreneur, and the increase will be
directly proportional. Based on the findings
of this study, there are four components that
make up HR competence: knowledge, skills,
beliefs, and motivation. Their strong level of
confidence and drive has a beneficial effect
on their respective business marketing
activities, even though the Yogyakarta SME
participants may have minimal knowledge
and abilities. SME business owners looking
to start their own companies have a
significant demand for entrepreneurial
marketing because it offers tactics that large
organizations do not have. Therefore, to
improve entrepreneurial marketing, SME
students in Yogyakarta need to improve their
HR skills as a whole. Our findings provide
support for the claims made by Ahmad and
ZainaI (2020) and Gerardo and AIberto
(2019), who argue that HR is an important
component for achieving the day-to-day
operations of an organization. Therefore,
acquiring related skills in business
management is an important step in the
process of building a strong and competitive
SME. The results lend credence to the claims
made by Shahhosseini (2021) and Franco
(2018), who argue that the application of HR
skills has a significant effect on the level of
success achieved by entrepreneurial
marketers.
5.2. The Influence of Innovation on
Entrepreneurial Marketing
According to statistical research findings,
innovation has a beneficial and materially
significant impact on entrepreneurship in the
field of marketing. The concept of
innovation is dissected into four different
aspects during this investigation, namely
product innovation, process innovation,
marketing innovation, and organizational
innovation. Seeing how innovators in the
food and beverage sector are increasing their
market share, this conclusion has important
meaning for the entrepreneurial marketing of
the food and beverage business. In order to
develop and expand their company in the
face of increasing competition and a society
whose behavior is constantly changing to
meet changing social customs and advances
in technology, company owners must be
innovative in their approach to problem
solving. One example is the COVID-19
pandemic that occurred this year.
As a result of the government rationing rules
that have been in effect in Yogyakarta since
the start of the latest outbreak, SME players
have had to adapt to shifting customer
preferences. To supply cutting-edge goods
and services to consumers, business owners
must be able to generate innovative
innovations, creative ideas and fresh points
of view. As a result, innovation is becoming
increasingly important not only as a tool for
ensuring business continuity but also as an
1894
important instrument for competing
successfully in the marketplace. The level of
success of a company in generating positive
consumer views will be directly proportional
to its capacity to produce new products,
services and processes. The end result of this
procedure is the generation of a distinctive
quality that differentiates them from their
competitors. The results of this study support
the findings of previous studies (Afriye,
2019; Sahhhosseini, 2021; MiIes, 2016;
Morrish, 2017) which shows that innovation
has a large influence on the marketing
strategies used by entrepreneurs.
5.3. The Effect of Human Resource
Competence on Competitive Advantage
According to statistical investigation
findings, having HR competence has a
materially beneficial impact on a company's
competitive advantage. Based on these facts,
the competitive advantage of Yogyakarta
SMEs is expected to increase in direct
proportion to the level of HR knowledge
possessed by the actors. HR competence can
be broken down into five different
components: one's knowledge, abilities,
motivation, level of self-confidence, and
personal philosophy. Having high HR
knowledge and skills has a positive effect on
the efficiency and effectiveness of task
completion; having a high level of
motivation increases productivity; having a
high level of self-confidence makes it easy to
make adjustments and take risks; and having
low levels of these traits has the opposite
effect. Therefore, human resources are an
important asset that requires careful planning
and management at every stage, from initial
recruitment to permanent placement to
developing skills and abilities to maintaining
positive working relationships. This is
necessary so that the talent of the company's
employees can help the company gain a
competitive advantage. For a business to
have a significant advantage over its
competitors, it is necessary to have a certain
level of human resource competency to fill
the available roles. The results of this study
provide evidence that supports the findings
of Nemi (2018) and AIajmi (2016) who
found that HR knowledge is related to
competitive advantage.
5.4. Effect of Innovation on Competitive
Advantage
According to statistical research findings,
innovation does have a good impact, but it
does not lead to long-lasting competitive
advantages. Due to a lack of substantial
resources, researchers at SMEs in
Yogyakarta are faced with significant
hurdles. Increased capital is necessary for
innovation, but small companies often have
limited access to financial and human
resources (Sdiku-Dushi, 2019). Due to their
limited resources, small businesses have a
hard time innovating as they are forced to
rely more on limited internal resources when
they manufacture their products. According
to the data collected in this sector, the most
typical type of small enterprise that develops
conventionally over generations is the one
that was started and developed by members
of the same family. Newly established
companies have difficulty realizing their full
potential in SMEs because of the constraints
that exist there, which include low levels of
education and skills and low levels of talent.
In addition, it is known that the Free Trade
Agreement (FTA) between the United States
and Canada which took effect in 2003, as
well as the Asia-Pacific Economic
Cooperation (APEC) in 2020 will have a
significant impact on the ability of small and
medium enterprises (SMEs) to compete in
the global market. free trade market. This is
what drives the government to support small
businesses in the islands so that they can be
productive and efficient in meeting
consumer needs. This finding is in line with
discussions (Afriye, 2019; Autio, 2019;
1895
Miles, 2016; Morrish, 2017) which highlight
the huge impact of direct innovation on a
firm's competitive advantage.
5.5. The Effect of Entrepreneurial
Marketing on Competitive Advantage
Findings from statistical studies show that
entrepreneurial marketing has a very large
influence and a positive impact on a
company's advantage over its competitors.
The relevance of this finding lies in the fact
that the comparative advantage possessed by
SMEs in Yogyakarta will increase in direct
proportion to the level of entrepreneurial
marketing carried out by the institution.
Yogyakarta SME practitioners demonstrated
their mastery in marketing by consistently
being proactive, adaptive, daring to take
risks, focused on customers, and intense on
customers. Small businesses, as a whole,
have limited resources, which means that
they need to be creative with how they offer
their products to be successful. The use of
entrepreneurial marketing strategies is very
helpful in situations like this (Sadiku-Dushi,
2019). According to Morris (2018), one way
to gain an advantage over one's competitors
in the twenty-first century is to implement a
marketing plan that takes an entrepreneurial
approach.
In this regard, it is very important for
business owners to have a solid
understanding of entrepreneurial marketing
in order to enhance their advertising efforts
and, ultimately, to realize the possibility of
gaining a competitive advantage. These
findings provide support for the argument
that entrepreneurial marketing has a major
impact on a company's competitive
advantage, which is supported by research
conducted by (Becherer, 2017);
(HidayatuIIah, 2019); and (Mahrous, 2020).
6. Conclusion
According to the findings of this study,
strategic demand management (HR) skills
and entrepreneurial marketing skills have a
positive and significant effect on the
competitive advantage of SME in
Yogyakarta, while HR skills and innovation
have a significant effect on SME marketing
skills. This shows that HR skills and
innovation have a significant impact on SME
marketing skills. However, HR knowledge
and innovation have a major impact on
competitive advantage when entrepreneurial
marketing is used as a mediator. Competence
in human resources is the main component
that determines the level of competitive
advantage of the company, perhaps more
than innovation. This highlights the
importance of HR in the process of gaining
an advantage over other businesses. For
companies to innovate, they need to have
knowledgeable human resources and
adequate financial resources. This is because
innovating requires an investment of money.
Since most of the people working in the food
and beverage industry still lack strong
human resources and innovation skills, to
gain a competitive advantage it is necessary
to harness the entrepreneurial spirit that
tends to penetrate SME workers and
incorporate them into marketing. This is
because most of the people working in the
food and beverage industry still lack strong
human resources and innovation skills.
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Dodi Setiawan Riatmaja
Universitas Amikom
Yogyakarta
Indonesia
Syahrial Shaddiq
Universitas Cahaya Bangsa,
Banjarmasin
Indonesia
