Competitive Business Environment, Market Orientation, Strategic Orientation and Performance of SMEs (empirical study on small and medium industries Pekanbaru city)

Abstract

The aim of this research was to analyze whether or not the petformance of Small dan Medium Enterprises in Pekanbaru Municipal was affected by a competitive business environment, market orientation and strategy orientation. The object of the research was small and medium industries in Pekanbaru Municipal. Ihe sample consisted of 135 small and medium industries in Pekanbaru Municipal such as food and beverage, convection and printing, wood, rattan and glass processing, welding and paving block industries. The research used a cluster sampling technique, namely, by mapping the population according to the existing sub-district in Pekanbaru and proportional random sampling, namely, the sample was proportionally taken in each sub-district. The data were both primary and secondary. The primaty data were those obtained from the industrial and cornmerce office of Pekanbaru Municipal.The data analysis technique was the structural equation modeling using LISREL 8.7 and SPSS 17. It was found out that the performance of the small and medium industries of Pekanbaru Municipal was affected by the competitive environment, market orientation, while strategy orientation was not affected by the performance of the small and medium industries in Pekanbaru Municipal. Another finding indicated that the competitive environment had no effect on the strategy orientation.It could than be concluded what affected the performance of the small and medium industries in Pekanbaru Municipal were the competitive envioronment and market orientation, while srategy orientation had no effect nn performance of tlze small and medium industries in Pekanharu Municipal. Th implication was that in order to increase the performance of the small and medium industries in Pekanbaru Municipal, a businessman should pay attention on the conzpelitive environinient and market orientation.

Keyword : Competitive Business Environment, Market Orientation, Strategy Orientation and Company Petformance