Analysis of Factors Affecting the Small and Medium Industry
Competitiveness of Timely Fruits
Marsela Altasari N, Ani Pinayani and Disman Disman
Universitas Pendidikan Indonesia, Setiabudhi 229, Bandung, Indonesia
Keywords: Competitiveness, Porter’s Diamond Model, Small and Middle Industries.
Abstract: This research has purpose to analyze the influence of business competency, demand, material supplier and
the difference of the product toward the competitiveness of dried fruits industries in Sukabumi Regency.
This research is conducted in the micro and middle industries in non-formal sector (non–incorporated
enterprise) in Sukabumi Regency using explanatory method. The sampling technique in this research is
using Non-Probability Sampling which is using saturated sampling its means to make all population as
sample. The sample in this research is 35 respondents of dried fruits entrepreneurs. And then the data
collected is using observe, distribute of questionnaire, interview, and literature study. The analyze data
technique used in this research is multiple regression analysis with the use of View 6 Software and SPSS 20.
The result of this research discovers (1) business competency, demand, and the difference of the product
simultaneously influence the competitiveness significantly (2) Business competency significantly influences
the competitiveness (3) demand significantly influences the competitiveness (4) the difference of product
influences the competitiveness.
1 INTRODUCTION
A country is categorized as a developed country, if it
has a strong economic foundation. One of them is
characterized by the development of Micro, Small
and Medium Enterprises (MSMEs) penunjang
kemajuan tersebut. MSMEs is positioned as a motor
or a driver of a country's economy. The role of
MSMEs is quite important for the Indonesian
economy, Because according to data from BPS
(Central Bureau of Statistics 2015) the number of
SMEs reached 65.5 million business units or about
99.9% of the total business units in Indonesia. In
terms of its contribution to the economy, MSMES
contributes 57.94% to Gross Domestic Product
(GDP) with a value of Rp.4.303.57 trillion of
investment value recorded at Rp.830, 9 trillion by
absorbing labor as much as 110.80 million people.
Facing global competition ahead of the ASEAN
Economic Community 2015, the endurance
possessed by MSMES will not be enough if not
accompanied by competitiveness. Competitiveness
is the company's ability to win the competition, and
this competitive advantage or competitiveness is at
the core of the company's performance. This is in
line with the opinion of Henry Faizal Noor (2007)
which states that "competitiveness is the ability or
toughness in competing to grab consumer attention
and loyalty. Consumer attention and loyalty can be
seized if a company can satisfy the needs and desires
of the consumer...”
One of the MSMES developing in Sukabumi
regency of West Java, especially small and medium
industry group is Small and Medium Industry
(Home Industry) Manisan. Small and Medium
Industry is one of the Small and Medium Industry in
Sukabumi, especially there is a sweets center in
Cisaat district that process fruit. The low
competitiveness of the Small and Medium Industry
in Manisan center area is a problem that requires a
solution as soon as possible. This is because the
Small and Medium Industry is part of SMEs as the
engine of the economy must be maintained and
continue to be improved in the face of competition
in the AEC 2015.
Based on Michael E. Porter's theory of
competitive advantage. Porter's Diamond Model is
widely used by researchers who want to examine the
competitive advantage of a company or industry,
whether on a national scale or on an individual scale.
Benefits of using Porter's Diamond model is a
436
N, M., Pinayani, A. and Disman, D.
Analysis of Factors Affecting the Small and Medium Industry Competitiveness of Timely Fruits.
In Proceedings of the 2nd International Conference on Economic Education and Entrepreneurship (ICEEE 2017), pages 436-440
ISBN: 978-989-758-308-7
Copyright © 2017 by SCITEPRESS – Science and Technology Publications, Lda. All rights reserved

comprehensive study because it contains internal
elements of the company (condition factor /
economic resources, demand conditions, corporate
strategy) and includes external elements (related
industries and support, government policy). So the
output of this research will touch many aspects
(companies, related industries and supporting
industries, government policy, industry players, not
limited to just one aspect of the company. The
purpose of this study is to determine the influence of
entrepreneur competence, demand and
differentiation on the competitiveness of Small and
Medium Industries Candied Sukabumi Typical.
2 LITERATURE REVIEW
There are various indicators that can be used to
measure competitiveness. Tulus Tambunan (2009)
provides some key indicators that can be used as a
measure of a company's competitiveness contained
in Table 1.
Table 1: Company competitiveness indicators.
No Indicato
r
1. Growth of value/ volume out
p
ut
2 Share of GDP
(
%
)
3. Market share
4. Omset value
5. Profit
6. Educational avera
g
e rate of entre
p
reneu
r
7. Expenditure for R&D
8. Number of certificates of standardization owned
and number of patents purchase
d
9. Standaritation
10. Type of technology use
d
11. Productivit
y
/ efficienc
y
12. Value of machine and production equipment /
asset value
13. The amount of
p
romotional s
p
en
d
14. Networking / cooperation with other parties
Source : (Tambunan, 2009)
Based on table 1, the most appropriate
competitiveness indicator used in this study is
market share. Because as we know that
competitiveness is the ability of a company to be
competitive or to be superior from a competitor
company, this competitive ability can be seen from
the control of the market owned by the company in
an industry that can provide high profits for the
company concerned. Market share is more suitable
to be used as indicator of competitiveness of small
and medium industries.
Michael E.Porter (2008) states that: "Increasing
market share can create problem barriers to
competing companies, which is one of the
competitive forces in the competitive strategy. With
the achievement of a large market share the
company is able to market the product more
competitively, especially in terms of competitors'
product prices”.
The Diamond model from Michael E. Porter is a
model often used to identify factors affecting the
competitiveness of a country or industry. These
factors include factors of production, demand
conditions, corporate strategy, structure and
competition, and related industries and supporters
Hamdy Hady (2009). Of each variable in the model
will determine the ability of the company to be able
to compete with its competitors industry. These four
attributes relate to business behavior and conditions
that can be seen from the company side. Therefore,
this model can also be used to analyze the
competitiveness of small and medium industries that
have easily identifiable business behavior and
industry conditions.
3 METHODS
The method used in this research is explanatory
research method, that is explanatory or explaining
research. According Sugiyono (2012) explanatory
research is "research that explains the causal
relationship between variables through hypothesis
testing".
4 RESULTS AND DISCUSSION
Test F is done based on multiple linear test results
then obtained the following results:
Table 2: Simultaneous hypothesis testing (F Test).
F
Statistic
F
table
Influence
401,4457 > 2,69 Si
g
nificant
Based on tabal 2 in the test results obtained value
of F arithmetic amounted to 401.4457 and the value
of F table 2.69 with df = 30 and significant level &
alpha; = 0.05. It can be concluded that F arithmetic
& gt; F table then Ho is rejected and Ha accepted, it
indicates that the independent variable (competence
of entrepreneur, differentiation, demand and raw
material suppliers) together influence on candied
Analysis of Factors Affecting the Small and Medium Industry Competitiveness of Timely Fruits
437

industry competitiveness variable in Sukabumi
Regency.
Based on the test results obtained value of F
arithmetic amounted to 401.4457 and the value of F
table 2.69 with df = 30 and significant level & alpha;
= 0.05. It can be concluded that F arithmetic & gt; F
table then Ho is rejected and Ha accepted, it
indicates that the independent variable (competence
of entrepreneur, differentiation, demand and raw
material suppliers) together influence on candied
industry competitiveness variable in Sukabumi
Regency.
4.1 Partial Coefficient Testing
Based on multiple linear regression test results
obtained the following results:
Table 3: Partial hypothesis test (T-test).
Variable Coefficient Prob Impact
Business
com
p
etence 0.233530 0.024 Si
g
nificant
Demand 2.123026 0.000 Si
g
nificant
Diferentiation -0.249157 0.007 Si
g
nificant
Hypothesis testing in this study using one-way
testing, this is done because the influence of
independent variables on the dependent variable is
obviously positive (alpha = 5%).
4.2 Coeffitient of Determination (R
2
)
Coefficient of determination useful to know how big
percentage coefficient determination useful to know
how big percentage change of variation of dependent
variable can be explained by variation of
independent variable, value of R2 is between 0
(zero) and 1 (one) closer to 1 mean research model
progressively. Based on Eviews estimation result,
R2 value is equal to & nbsp; 0.978, meaning that the
regression line is able to explain 97.80% of the facts
and the rest of 1.3% is explained by other variables,
or it can be said that competitiveness variable can be
explained by competence variables entrepreneurs,
demand, raw material suppliers, and only refficiency
Of 97.80% and the remaining 1.3% is explained by
other variables outside the variables studied.
4.3 Effect of Competence of
Entrepreneur on Competitiveness
Based on the results of research and hypothesis
testing in this study, it is known that the competence
of entrepreneurs affect the competitiveness (market
share) Small and Medium Industry Candied
Sukabumi Typical. This is evidenced by the
significance value smaller than 0.05. That is, the
higher the competence of entrepreneurs will affect
the improvement of competitiveness.
This is in accordance with what is explained by
Michael E.Porter in the Diamond Model which says
that the variable of factors in which there are
indicators of human resources, especially the
competence of entrepreneurs have a positive effect
on competitiveness. According to Michael E. Porter
in the scope of a business environment that is
increasingly highly competitive, it is necessary
knowledge of expertise in the field of companies
that need to be owned by a businessman. Therefore,
it can not be denied that one of the factors of a
company has a high competitive starategi that is
dependent on the competence of the entrepreneur,
especially in today's increasingly competitive
business environment so that according to the
statement (Poerter, 1999).
In addition, the results of this study also supports
the statement Tulus Tambunan (2008). Then this
research is in accordance with the findings of Yuli
Fitriyani (2009). That the condition of the factors
consisting of human resources, capital resources,
knowledge resources, infrastructure resources and
physical resources have an influence on
competitiveness, this is because a company is unable
to produce without support from the resources it has.
So the sweets industry can not have strong
competitiveness, if not supported by the competence
of entrepreneurs who viewed from aspects of
technical competence, marketing competence,
financial competence, and human competence.
The four competencies must be owned by
candied sweets industry in an integrated way. Based
on the results of research conducted by the authors,
the influence of competence of entrepreneurs to
competitiveness due to the activity of condition
factors such as competence candied industry
entrepreneurs in Sukabumi Regency has a
considerable contribution to the improvement of
competitiveness.
In the results of this study the entrepreneurs
(owners) indicate to have so play a direct role in
business activities, so that information related
products and matters relating to consumers must be
ICEEE 2017 - 2nd International Conference on Economic Education and Entrepreneurship
438

known to entrepreneurs (owners). Therefore with the
competence of a good entrepreneur will certainly
greatly affect the increase in sales volume which
will ultimately affect the market share and create a
high or low competitiveness of the sweet industry
itself.
So it can be concluded that entrepreneur
competence variables affect the market share
(competitiveness) candied industry in Sukabumi
regency. So that candied entrepreneurs should be
more focused and improve the competence of
entrepreneurs in order to increase competence in
order to achieve good market share
(competitiveness).
4.4 Effect of Demand on
Competitiveness
Based on the results of research and hypothesis
testing in this study, it is known that demand affects
the competitiveness (market share) of Small and
Medium Industry Candied Sukabumi Typical. This
is evidenced by the significance value smaller than
0.05. This means that higher demand increasingly
competitiveness. Based on the results of the research
that is known the criteria of low demand because as
many as 16 respondents or 45.71%. This is because
if the consumer set the price too high then the
demand will be reduced. This is in accordance with
the sound law of demand contained in Samuelson
(1997) when the price rises then the demand will fall
and vice versa when the price drops then the demand
will rise. But in this study there are 4 producers that
demand is high enough even though the price is
high. It happened to the candied products to dry the
seaweed. These products include candied products
that are popular with consumers, but because their
raw materials are quite expensive and hard to come
by. So only a few entrepreneurs who produce
candied products to dry seaweed. So for
entrepreneurs who do not have adequate capital,
prefer not to produce the product. From the findings
of the field, it supports the statement of Michael E.
Porter, that a company must be able to recognize the
needs required by customers, so that companies can
provide brang or services required by customers, so
the demand for goods or services produced can
increase.
4.5 Effect of Diferentiation on
Competitiveness
Based on the analysis of research data and
hypothesis testing that has been done that known
differentiation significantly influence the
competitiveness of candied industry but has a
negative effect. This means that the higher the
differentiation further reduces competitiveness. The
results of this study are not in line with what has
been disclosed by Michael E. Porter in his diamond
model which states that the differentiation variables
as one indicator of the variable company strategy
have a positive effect on competitiveness.
Product differentiation is carried out to expand
market share through the diversification of products
that can be selected by the community based on the
same raw materials. Increased product diversity can
be done if the company provides some additional
funds and new technology to make more product
variations or provide good and precise product
information about the product. In this research, it is
important to improve product differentiation is the
right information to the consumer becomes
important because the consumer will get the correct
knowledge and understanding about the product.
One way to determine the level of a company's
business to provide correct and accurate information
to consumers is to see the amount of funds allocated
for promotional services including advertising costs
(Irfan Hidayat, 2006). Based on the results of the
research note that product differentiation on the
factor of the product is in high criteria, it is proved
that most respondents (34.29%) are at a high level of
differentiation. However, with the high
differentiation of each sweets product does not make
the competitiveness to be high, it has a negative
relationship or influence. The results of this study
are not the same as the theory. Because by creating
differentiated differentiation, it makes the
production cost becomes inefficient. This leads to
increased costs, including costs such as employee
salary and raw material costs. & Nbsp; In addition to
requiring additional funding for product
differentiation, new technologies are also needed to
make more variety of products or provide good and
precise product information about the products
produced to potential customers. During this time
that differentiation has a negative relationship to
competitiveness is the information about the
differentiation of products that have been produced
by candied producers are not well conveyed to the
consumer, so that consumers assume no product
innovation made by candied entrepreneurs.
Analysis of Factors Affecting the Small and Medium Industry Competitiveness of Timely Fruits
439

4.6 Effect of Competence of
Entrepreneur, Demand and
Differentiation on Competitiveness
From the results of ansalysis using multiple linear
log regression method obtained that independent
variables or independent variables of entrepreneur
competence, demand and differentiation
simultaneously affect the competitiveness of candied
industry in Sukabumi Regency.
5 CONCLUSIONS
The entrepreneurs' competence, demand and
differentiation have a significant effect on candied
industry competitiveness in Sukabumi Regency. The
overall picture of the competitiveness of candied
entrepreneurs in Sukabumi district, which is seen
from the market share, is still in the low category.
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