Analysis of Business Strategies in Increasing Competitive Advantage for SMEs in the Digital Era

Abstract

In the era of rapid digital transformation, Micro, Small, and Medium Enterprises (MSMEs) are required to adapt to new business models to remain competitive and sustainable. The increasing use of digital technology has transformed how businesses operate, interact with customers, and deliver value. This study aims to analyze the effect of business strategies on enhancing the competitive advantage of MSMEs in the digital era. A quantitative research approach was employed by distributing questionnaires to MSME owners and managers who have adopted digital strategies in their business operations. The data collected were analyzed using simple linear regression to examine the relationship between business strategies—namely innovation, differentiation, and market orientation—and competitive advantage. The results indicate that business strategies have a significant positive influence on MSMEs’ competitive advantage, particularly through product innovation and the utilization of digital technology. These findings highlight that adaptation to digital transformation is not merely an option but a strategic necessity for survival and growth. The study recommends that MSMEs develop adaptive and innovative strategic planning to strengthen their competitiveness in an increasingly dynamic and technology-driven market environment,