Harnessing Innovation: Exploring the Impact of Market Orientation and Firm Resources on Performance in West Sumatra's Event and Party Services

Authors

  • Chintia Wulan Sari Universitas Andalas
  • Yulia Hendri Yeni Universitas Andalas
  • Vera Pujani Universitas Andalas

DOI:

https://doi.org/10.37385/ijedr.v5i4.6286

Keywords:

Market Orientation, Firm Resources, Innovation, Firm PerformanceFirm Performance

Abstract

Marriage holds a sacred significance in Minangkabau culture, representing the pinnacle of the life cycle, where customs transcend mere entertainment to embody profound philosophical and cultural values. Despite the substantial opportunities for party service businesses in West Sumatra, the performance of firms in this sector often falls short of expectations. Observations reveal recurring issues, including vendor delays and dissatisfaction with service quality in areas such as decoration, photography, videography, and catering. These problems are primarily attributed to inadequate resource management and poor strategic decision-making. This study employs explanatory research with a quantitative approach, utilizing hypothesis testing to examine the relationships among market orientation, firm resources, innovation, and firm performance. The validity and reliability of the questionnaire instrument were confirmed to ensure accurate data analysis. The findings demonstrate that, within the context of party service businesses in West Sumatra, both market orientation and firm resources significantly impact innovation and firm performance directly; however, innovation does not serve as an effective mediator in this relationship.

References

Aboramadan, M., Albashiti, B., Alharazin, H., & Zaidoune, S. (2020). Organizational culture, innovation, and performance: A study from a non-western context. Journal of Management Development, 39(4), 437–451. https://doi.org/10.1108/JMD-06-2019-0253

Aljuboori, Z. M., Singh, H., Haddad, H., Al-Ramahi, N. M., & Ali, M. A. (2022). Intellectual capital and firm performance correlation: The mediation role of innovation capability in Malaysian manufacturing SMEs perspective. Sustainability, 14(1). https://doi.org/10.3390/su14010154

Amaliah, N., & Setiawan, I. (2021). The integration of market orientation and innovation in creative industries: An exploratory study. Journal of Business Research, 132, 245–255.

Anderson, J. C., & Covin, J. G. (2020). Market orientation and innovation: A review and future directions. Journal of Product Innovation Management, 37(5), 440–459.

Bahta, D., Yun, J., Islam, M. R., & Ashfaq, M. (2020). Corporate social responsibility, innovation capability and firm performance: Evidence from SMEs. Social Responsibility Journal, 17(6), 840–860. https://doi.org/10.1108/SRJ-12-2019-0401

Bamfo, B. A., & Kraa, J. J. (2019). Market orientation and performance of small and medium enterprises in Ghana: The mediating role of innovation. Cogent Business and Management, 6(1). https://doi.org/10.1080/23311975.2019.1605703

Barasa, L., Knoben, J., Vermeulen, P., Kimuyu, P., & Kinyanjui, B. (2017). Institutions, resources and innovation in East Africa: A firm level approach. Research Policy, 46(1), 280–291. https://doi.org/10.1016/j.respol.2016.11.008

Demirkan, I. (2018). The impact of firm resources on innovation. European Journal of Innovation Management, 21(4), 672–694. https://doi.org/10.1108/EJIM-12-2017-0196

Rompis, E. H., & Mananeke, L. (2022). Effect of entrepreneurship orientation, product innovation, and competitive advantage on marketing performance (Case study of wood craft business in Tagulandang District, Sitaro Regency). Jurnal Ekonomi dan Bisnis, 10(3), 447–457.

Ferdinan, I. (2021). The role of innovation in mediating firm resources and performance: A study on service industries. International Journal of Services and Operations Management, 38(2), 123–139.

Freeman, R. E., Dmytriyev, S. D., & Phillips, R. A. (2021). Stakeholder theory and the resource-based view of the firm. Journal of Management, 47(7), 1757–1770. https://doi.org/10.1177/0149206321993576

Genc, E., Dayan, M., & Genc, O. F. (2019). The impact of SME internationalization on innovation: The mediating role of market and entrepreneurial orientation. Industrial Marketing Management, 82, 253–264. https://doi.org/10.1016/j.indmarman.2019.01.008

Gupta, S., Kumar, S., Singh, S. K., Foropon, C., & Chandra, C. (2018). Role of cloud ERP on the performance of an organization: Contingent resource-based view perspective. International Journal of Logistics Management, 29(2), 659–675. https://doi.org/10.1108/IJLM-07-2017-0192

Hatzikian, Y. (2015). Exploring the link between innovation and firm performance. Journal of the Knowledge Economy, 6(4), 749–768. https://doi.org/10.1007/s13132-012-0143-2

Hermanto, D. (2022). External factors influencing innovation in small enterprises: Evidence from the service sector. International Journal of Entrepreneurship and Innovation Management, 26(3), 193–208.

Huang, S. M., Ou, C. S., Chen, C. M., & Lin, B. (2006). An empirical study of relationship between IT investment and firm performance: A resource-based perspective. European Journal of Operational Research, 173(3), 984–999. https://doi.org/10.1016/j.ejor.2005.06.013

Intan, P., Putri, P. P., Ni, N., Kerti, Y., & Rahyuda, K. (2016). The role of innovation in mediating market orientation to company performance. Jurnal Dinamika Manajemen, 7(2), 105–116. http://jdm.unnes.ac.id

Karaev, F., & Mercan, M. (2023). Exploring the impact of market orientation and innovation on firm performance in the beverage industry: The mediating role of innovation. Eurasian Journal of Economic and Business Studies, 1(67), 139–155. https://doi.org/10.47703/ejebs.v1i67.256

Kusuma, A., & Hidayat, R. (2021). Adapting to consumer preferences: Challenges in local service industries. Asian Journal of Business and Management, 9(1), 12–24.

Lee, R., Lee, J. H., & Garrett, T. C. (2019). Synergy effects of innovation on firm performance. Journal of Business Research, 99, 507–515. https://doi.org/10.1016/j.jbusres.2017.08.032

Lin, Y., & Wu, L. Y. (2014). Exploring the role of dynamic capabilities in firm performance under the resource-based view framework. Journal of Business Research, 67(3), 407–413. https://doi.org/10.1016/j.jbusres.2012.12.019

Nursal, M. F., Rianto, M. R., & Bukhari, E. (2022). The influence of market orientation, entrepreneurial orientation, knowledge management, and learning organization on performance mediated by innovation in culinary SMEs in Bekasi. East Asian Journal of Multidisciplinary Research, 1(8), 1691–1702. https://doi.org/10.55927/eajmr.v1i8.1266

Na, Y. K., Kang, S., & Jeong, H. Y. (2019). The effect of market orientation on performance of sharing economy business: Focusing on marketing innovation and sustainable competitive advantage. Sustainability, 11(3). https://doi.org/10.3390/su11030729

Permana, S. (2022). Performance evaluation in local industries: Strategies for improvement. Indonesian Journal of Business and Economics, 19(4), 302–315.

Putra, M. A., & Sulistyo, A. (2021). Risk-taking behavior among business owners in West Sumatra: An exploratory analysis. Journal of Indonesian Economics and Business, 16(2), 95–109.

Prifti, R., & Alimehmeti, G. (2017). Market orientation, innovation, and firm performance—An analysis of Albanian firms. Journal of Innovation and Entrepreneurship, 6(1). https://doi.org/10.1186/s13731-017-0069-9

Rahmawati, N. (2022). Customer dissatisfaction in wedding services: Causes and solutions. Journal of Marketing Management, 25(2), 157–171.

Roostika, R. (2019). SMEs craft industry application of resource-based view: Capabilities role of SMEs performance. Review of Integrative Business and Economics Research, 8, 423. http://buscompress.com/journal-home.html

Sari, R. D., Indratno, S., & Pramono, S. (2020). Strategic decision-making and its impact on innovation in service industries. International Journal of Service Science and Management, 10(1), 55–68.

Santoso, H. (2020). Vendor coordination and its effect on wedding service performance: A study in Padang. Asian Journal of Hospitality and Tourism, 8(3), 199–215.

Saputra, A., & Wijaya, D. (2021). Quality service delivery in niche markets: Challenges and strategies. International Journal of Business and Management Invention, 10(4), 1–10.

Tajeddini, K., & Ratten, V. (2020). The moderating effect of brand orientation on inter-firm market orientation and performance. Journal of Strategic Marketing, 28(3), 194–224. https://doi.org/10.1080/

Taouab, O., & Issor, Z. (2019). Firm performance: Definition and measurement models. European Scientific Journal, ESJ, 15(1). https://doi.org/10.19044/esj.2019.v15n1p93

Tjahjono, H., Priyanto, T., & Yudono, F. (2021). Firm resources and their role in innovation in the service industry. Journal of Innovation Management, 9(1), 33–49.

Uzmez, A., Karaboga, H. A., Karaboga, T., & Zehir, C. (2019). Market orientation and innovation performance: The mediating role of entrepreneurial strategic posture. European Proceedings of Social and Behavioural Sciences, 1(2), 819–831. https://doi.org/10.15405/epsbs.2019.01.02.70

Varadarajan, R. (2020). Customer information resources advantage, marketing strategy and business performance: A market resources-based view. Industrial Marketing Management, 89, 89–97. https://doi.org/10.1016/j.indmarman.2020.03.003

Wardhani, L. (2022). Competitive strategies for local markets: A focus on creative industries. Journal of Regional Studies, 15(2), 81–95.

Wahyuni, S. (2020). Market orientation in regional industries: Exploring the creative sector. Indonesian Journal of Management, 12(1), 47–61.

Yadav, S. K., Tripathi, V., & Goel, G. (2019). Mediating effect of innovation with market orientation and performance relationship. Management Research, 17(2), 152–167. https://doi.org/10.1108/mrjiam-03-2018-0827

Yaskun, M., Sudarmiatin, Hermawan, A., & Rahayu, W. P. (2023). The effect of market orientation, entrepreneurial orientation, innovation and competitive advantage on business performance of Indonesian MSMEs. International Journal of Professional Business Review, 8(4). https://doi.org/10.26668/businessreview/2023.v8i4.1563

Yusuf, R., & Nur, H. (2021). The role of technology in fostering innovation in regional service industries. International Journal of Technology Management and Sustainable Development, 20(1), 19–34.

Zehir, C., Köle, M., & Y?ld?z, H. (2015). The mediating role of innovation capability on market orientation and export performance: An implementation on SMEs in Turkey. Procedia - Social and Behavioral Sciences, 207, 700–708. https://doi.org/10.1016/j.sbspro.2015.10.141

Downloads

Published

2024-10-13

How to Cite

Sari, C. W., Yeni, Y. H., & Pujani, V. . (2024). Harnessing Innovation: Exploring the Impact of Market Orientation and Firm Resources on Performance in West Sumatra’s Event and Party Services. International Journal of Economics Development Research (IJEDR), 5(4), 3553–3569. https://doi.org/10.37385/ijedr.v5i4.6286