DETERMINANTS OF COMPETITIVE ADVANTAGE OF CONVECTION SMES TOWARDS DIGITAL TRANSFORMATION (CASE STUDY IN WEST JAVA PROVINCE)

This study aims to develop competitive advantage in order toimprove competitivenessandmaintainitscompetitivepositionagainst competitors,bothwithimportedanddomesticproducts.Theresearch examinesandanalyzestheinfluenceoforganizationalculture,business environment,innovation,rawmaterialrequirements,ondigital transformationandcompetitiveadvantage.Digitaltransformationis notonlyadependentvariableonfourindependentvariables,butalso anindependent variablewhentestingandanalyzingitseffecton competitiveadvantage. ThesampleinthisstudyweretheownersofconvectionSMEsinWest Java.Todetermine the effectbetweenvariables,the analysisusedistheStructuralEquationModel(SEM)with the Partial LeastSquare (PLS)approach.Theresearchconcludesthatorganizationalcultureand innovationhavenosignificant effecton digital transformation.The businessenvironmentandtheneedforrawmaterialshaveasignificant effect ondigitaltransformation. Organizational culture,innovation, andtheneedforrawmaterialshaveasignificanteffectoncompetitive advantage.Inthebusinessenvironment,digitaltransformationhasno effect on competitiveadvantage.