Strengthening the Competitiveness of Fashion MSMEs as a Regional Economic Development Strategy: The Role of Market Sensing Capability, Product Innovation, and Business Strategy in Pasuruan Regency

Kholid Murtadlo; Sarifatul Jannah

doi:10.35891/0w2hsw90

Authors

Kholid Murtadlo Universitas Yudharta Pasuruan
Sarifatul Jannah Universitas Yudharta Pasuruan

DOI:

https://doi.org/10.35891/0w2hsw90

Keywords:

Competitive Advantage, Business Strategy, Fashion MSMEs, Market Sensing Capability, Product Innovation, Resource Based View

Abstract

This study examines the effect of market sensing capability, product innovation, and business strategy on competitive advantage among fashion micro, small, and medium enterprises (MSMEs) in Pasuruan Regency, grounded in the Resource-Based View (RBV). A total of 100 respondents were selected from fashion MSMEs registered with the Pasuruan Regency Cooperatives Office using purposive sampling. Data were analyzed through validity, reliability, classical assumption, multiple linear regression, partial (t), and simultaneous (F) tests using IBM SPSS Statistics 22. The three predictors jointly explained 50.3% of the variance in competitive advantage). Market sensing capability and business strategy showed a positive and significant effect, whereas product innovation showed a significant but negative effect, indicating that innovation efforts have not yet been efficiently converted into a valuable, rare, and hard-to-imitate resource. The main challenges include a lack of innovation due to seasonal trends. Businesses can implement direct market monitoring by taking swift action, innovating their products, and planning business strategies to achieve their long-term goals or objectives. Simultaneously, all three variables significantly affect competitive advantage. This study extends prior work on food-product MSMEs by adding business strategy as a predictor within the fashion MSME context, where product imitability is comparatively high. The findings suggest that fashion MSMEs should manage innovation more efficiently while strengthening market sensing and cost-focused, hard-to-imitate business strategies to sustain competitive advantage.

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