Market Sensing Capability, Entrepreneurial Orientation, Product Innovativeness Success, Speed to Market and SMEs Performance

Market Sensing Capability, Entrepreneurial Orientation, Product Innovativeness Success, Speed to Market and SMEs Performance

Elia Ardyan (Faculty of Economics and Business, Diponegoro University, Central Java, Indonesia and STIE Surakarta, Surakarta, Indonesia)
Copyright: © 2015 |Pages: 15
DOI: 10.4018/IJBIR.2015070102
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Abstract

The purpose of this research is to determine market sensing capability, product innovation success, speed to market, and entrepreneurial orientation on SME's performance. The sample of this research are 168 SME's owner or manager in Java, Indonesia. This research uses Structural Equation Model to hypothesis test and uses AMOS 21 in analysis data. Results of the research find that Entrepreneurial orientation and product innovativeness success have positive and significant effect on SME's performance but market sensing capability and speed to market have no significant effect. Another result of this study finds that market sensing capability has significant effect on speed to market and product innovativeness success but entrepreneurial orientation has no significant effect on product innovativeness effect.
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1. Introduction

Indonesia is one of the country with the Small and medium-sized Enterprises (SMEs) growth level which is significant enough. SMEs is generally seen as the fuel (Wakkee, Van Der Veen, & Eurlings, 2015) or the significant pillar for the economy growth in the developing country (Meutia & Ismail, 2012; Setyaningsih, 2012). SMEs becomes one of the crucial factor causing Indonesia does not fall at the economy crisis in the year 2008.

The successful SMEs will focus on the innovation (Ireland & Webb, 2007), because innovation will enhance SMEs performance (Keskin, 2006). Innovation will not happen if there are no affecting factors. In several literature studies, innovation can appear due to some factors, such as product understanding, consumer perception (Fang, Chang, Ou, & Chou, 2014; Gofman, Moskowitz, & Mets, 2009), competitor, process (Hooley, Broderick, & Moller, 1998; Leavy, 2005), and environment business change (Fang et al., 2014; Overby, Bharadwaj, & Sambamurthy, 2006; Setia, Sambamurthy, & Closs, 2008). Innovation also appears through entrepreneurial orientation.

Market intelligent is the important activity must be done by the company in understanding the market. One of the ways is market sensing. The capability to sense the market is one of the capabilities will be owned by the market oriented company (Day, 1994). Market sensing capability is the company capability to understand the environment change. The market sensing process can be simplified as follows: investigation initiation, acquisition information, information distribution, interpretation, information usage, and result evaluation (William, 2000). The result of market sensing can be in the form of information, like the information about competitor, environment, consumer, and other important information for the company. The information obtained is important for long term planning(William, 2000).

The purpose of this research is to determine market sensing capability, product innovation success, speed to market, and entrepreneurial orientation will enhance SME's performance.

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