Internationalization Model for Increasing the Competitiveness of Local Creative Industries in ASEAN Economy Community

The main problem in this study is the weak performance of SMEs. This can be caused by business culture factors (market orientation and entrepreneurial orientation) as well as competitive strategy factor in SMEs. The research problem raised was how the effect of market orientation, entrepreneurial orientation, and competitive strategy on SME performance. The purpose of this study was to analyse the effect of market orientation, entrepreneurial orientation, and competitive strategy on SME performance. The research sample was 100 creative industry SMEs in Special Region of Central Java Province with business field of handicrafts (various handicrafts of silver, natural fibres, earthenware, leather, and wood) and fashion business field (various batik). Hypothesis testing used path analysis. The results show that there is a positive and significant influence between market orientation and entrepreneurial orientation on competitive strategy (differentiation, low cost, and focus strategies). Market orientation and entrepreneurial orientation have a positive effect on SME performance. Competitive strategies (differentiation, low costs, and focus strategies) have a positive effect on SME performance. Entrepreneurial orientation has a higher direct influence than market orientation.