The Effect of Market Orientation, Innovation, and Entrepreneurial Orientation to the Competitive Advantage of the Coffee Shops in Indonesia

Abstract

This study investigates the effect of marketing orientation, innovation, and entrepreneurial orientation on the competitive advantage of coffee shops in Indonesia. The study adopted qualitative and quantitative approaches, utilizing a questionnaire and in-depth interviews to collect quantitative data. The sample is 200 coffee shops in Indonesia who have run the business for two years or more. The researcher interviewed respondents who are three business owners/ managers who have a coffee shop that is unique from their competitors. The quantitative data is analyzed using descriptive statistics and multiple regression analysis, and the qualitative data is analyzed using deductive analysis. The findings of the study revealed that market orientation, innovation, and entrepreneurial orientation have a positive and significant effect on the competitive advantage of coffee shops in Indonesia. The most important factor that influences the competitive advantage is entrepreneurial orientation, followed by innovation and market orientation. The findings from the interview revealed that to gain a competitive advantage, the coffee shops provide high-quality coffee products, offer a variety of flavor options, and create a comfortable place. To survive during competition, the coffee shops are doing online advertisements on social media, inviting influencers regularly to promote coffee products, and paying attention to customers’ preferences/ requirements/ demands by engaging customers on social media or conventionally. The coffee shops distinguish themselves from their competitors by offering unique decorations or selling experiences and inspiration. To support the innovations offered, coffee shops have compatible coffee machines and sufficient knowledge to be creative with the menu. Coffee shops proactively seize the opportunity to increase their sales by giving promos during certain seasons, teaching sign language programs in schools/campuses/corporates, and visiting other coffee shops to understand their position in the market.