RESPONSIBLE ENTREPRENEURSHIP VISION DEVELOPMENT AND ETHICS

Effect of core competence on
sustainable competitive advantages of batik
Banyumas Small and Medium Enterprises
Rahab BINTARA 1 , Nurul ANWAR 2 , Rawuh Edy PRIYONO 3
1,2
Faculty of Economics and Business-Jenderal Soedirman University, Indonesia
3
Faculty of Social and Political Science-Jenderal Soedirman University, Indonesia
1
rahab_inc@yahoo.co.id
Abstract: Core competence of Banyumas batik small and medium enterprises (BBSMEs) as one way
to gain sustainable competitive advantage. This study aims to examine effect of firm’s core competence on
competitive advantage and performance of small and medium enterprises. Survey conducted on 58 owner
and manager of small firm of Banyumas batik in Banyumas Region. The study used convenience sampling
method. Respondents in this study were owners and managers of Small to Medium Sized Enterprises of batik
industry in Banyumas Region, Central Java, Indonesia. A questionnaire be administered to the sample chosen
for the study.
Data was analysed by multiple regression analysis. The testing result showed that effect of relationship
competence, adaptation competence and innovation competence has significantly effect on firm’s innovativeness.
Competitiveness significantly effect on small and medium industry business performance. The ability
of entrepreneurs to build business network has eased an information exchange and also to make a social
relatedness in order to improve the competitive advantage. The result of the study provides contribution to
Resources-Based View (RBV) theory, where the companies were able to improve all their capabilities in
enhancing the competitive advantage and small and medium firm’s performance.
Keywords: core, competence; competitive; batik; Banyumas
Introduction
The role of small medium enterproses (SMEs) in economic development and growth is
crucial, and its contribution is not only in developing countries but also in developed ones.
SMEs is considered as the exceptional industry since this kind of industry does not only absorb
the larger sales force compared to the larger industry, but it also provides the most significant
contribution to the national gross domestic product (GDP) (Tambunan, 2009). In the frame
of national economy performance, SMEs has contributed 56 percent to the total GDP of
Indonesia. This facts indicates that more than half of the Indonesian’s economy has been sup-