The Effect of Entrepreneurial Orientation and Service Innovation on
Sustainable Competitive Advantage on the Performance of 3, 4 and 5
Star Hotels in Indonesia
I NYOMAN SARYA
Doctor of Research in Management Binus Business School,
Binus University Jakarta Indonesia,
Jl. K. H. Syahdan No. 9, Kemanggisan, Palmerah,Jakarta, 11480,
INDONESIA
MTS. ARIEF
Management Department, BINUS Business School Doctor of Research Management,
Jl. K. H. Syahdan No. 9, Kemanggisan, Palmerah,Jakarta, 11480,
INDONESIA
HARDIJANTO SAROSO
Management Department, BINUS Business School Doctor of Research Management,
Jl. K. H. Syahdan No. 9, Kemanggisan, Palmerah,Jakarta, 11480,
INDONESIA
AGUSTINUS BANDUR
Management Department, BINUS Business School Doctor of Research Management,
Jl. K. H. Syahdan No. 9, Kemanggisan, Palmerah,Jakarta, 11480,
INDONESIA
Abstract: - The purpose of this study was to determine the effect of entrepreneurial orientation and service
innovation on sustainable competitive advantage on the performance of 3,4 and 5 star hotels in Indonesia. The
researchers took a quantitative approach by measuring the sample variables built from the construct and
representing the research population. The unit of analysis in this study is a company engaged in
accommodation services (hotels) with 3, 4, and 5 stars spread throughout Indonesia, namely in Bali, West Java,
DKI Jakarta, Central Java, East Java, DI Yogyakarta, Banten, Lombok., Sulawesi, Kalimantan, Sumatra, while
the unit of observation is the General Manager of the Hotel. Researchers take a quantitative approach using
Partial Least Square (PLS) method used in this study to analyze the response. Based on the analysis and
discussion above, it shows that Entrepreneurial orientation has no effect on Sustainable Business Growth,
Service Innovation has a positive effect on Sustainable Business Growth, Entrepreneurial Orientation has a
positive effect on Firm Performance, Service Innovation has no positive effect on Firm Performance, Service
Innovation has a positive effect on Firm Performance and Sustainable Competitive Advantage is proven to be
able to mediate the relationship between Service Innovation and Firm Performance. Based on this research, it
shows that service innovation is important for organizations engaged in services to maintain competitive
advantage for their long-term survival in a competitive and complex business environment.
Key-Words: - Sustainable Business Growth, Firm Performance, Service Innovation, Entrepreneurial
orientation
Received: March 15, 2022. Revised: October 12, 2022. Accepted: November 15, 2022. Published: December 12, 2022.
1 Introduction
The growth in the number of hotels (supply) in 2019
was strongly influenced by very high growth in Bali
and Jakarta, the two largest markets in Indonesia
with an increase of 32.5% in Bali and 19% in DKI
Jakarta, respectively, [1]. Meanwhile, the need for
the number of rooms (demand) grew lower, namely
for Bali by 22% and for Jakarta only 4.6%. The
need for five-star hotel rooms in Indonesia in the
last five years has grown by 13%, the number of
which varies between provinces.
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Covid-19, which has hit most countries in the
world, has greatly affected world tourism, due to
reduced international tourist travel, [2]. The decline
in international tourist travel caused the hotel room
occupancy rate to also drop dramatically. Based on
BPS data (2020) shows that the arrivals of foreign
tourists to Indonesia are estimated to only be able to
return to the level of 2019 in 2021 (pessimistic
level) or 2022 (optimistic level).
In an effort to make the hotel have a sustainable
competitive advantage and be able to improve
performance, it is necessary to carry out an
appropriate management strategy, [3]. This strategy
can be done by optimizing existing resources,
maximizing dynamic capabilities, continuing to
innovate services, adopting information technology
in the Industry 4.0 era, and being entrepreneurship-
oriented, [4].
Victorino et al., [5], stated that “there are several
factors that influence hotel innovation such as hotel
type, information technology, and service
customization.” The results of his research found
that service innovation had a small effect for the
type of hotel that had a large effect. While Tseng et
al., [6], investigated services, various innovation
configurations that can increase the average
occupancy rate impact on customer satisfaction).
Further research by Žitkien et al., [7], shows that
“most hotel chains have departments built to
encourage and reward innovation.”
Research by den Hertog et al., [8], adopts a
demarcation perspective that “prioritizes increased
innovation related to better company performance.”
Therefore the hotel industry must innovate in
various key service concepts, and supporting
processes related to customers. Meanwhile Chivandi
et al., [9], found indications that “service innovation
is related to improving hotel business performance.”
Research by Khan et al., [10], states that “a
sustainable competitive advantage can be achieved
with a competitive strategy, which in turn will
improve business performance.” Gomes & Romão,
[11], added that “for several companies it has been
proven to be able to create sustainable performance
with competitive advantages.” Competitive
advantages in this regard are the innovation of more
efficient technological processes, new products and
service procedures as well as the development of
dynamic capabilities. While Khan et al., [10],
concludes that “sustainable competitive advantage
has received a lot of attention from strategic
management scientists in a turbulent era because of
the importance of scientific contributions to
improving company performance, both financial and
non-financial performance.” Empirical studies have
also proven that sustainable competitive advantage
based on aspects of differentiation and basic costs
contributes significantly to company performance,
[12], [13], [15]. Furthermore, research by Enz, [14],
concluded that “companies that earn high profits
compared to competitors because they have a
competitive advantage.”
According to Cheng, [16], to have a competitive
advantage a hotel must be able to create value by
offering lower prices, unique service levels.
Meanwhile, Santoro, [17] concluded that “hotel
performance can be measured by the "RevPar"
index, but in a different way.” It was found that
there is a significant correlation between
performance and category (star class), this shows
that quality is a driver of the hotel industry's
performance.
Furthermore Žitkien et al., [18], concluded that
“superior financial performance occurs from the
company's unique resources and management
capabilities.” Meanwhile, Williamson [19] found
that “the results of dynamic capabilities can help to
achieve sustainable competitive advantage (SCA)
by carrying out a series of innovations that are able
to make companies work faster than competitors.”
2 Literature Review and Hypotheses
2.1 Entrepreneurial Orientation Towards
Sustainable Competitive Advantage
Yohanes & Hidayati's research, [20], in the hotel
industry in Central Java found that HR capabilities,
EO, and market orientation greatly determine the
competitive advantage of hotels. Furthermore,
Pratono et al., [21], found strong indications that EO
and market orientation has an effect on sustainable
competitive advantage. Guimarães et al., [22], in a
study in Brazil found that there is a positive
correlation between EO, market orientation and
knowledge management orientation with sustainable
competitive advantage. Phapruke
Ussahawanitchakit's research, [23], in Thailand
found that EO has an effect on the level of
competition for small and medium companies.
H1: There is a significant effect between
Entrepreneurial Orientation for increasing
Sustainable Competitive Advantage.
2.2 Service Innovation Towards Sustainable
Competitive Advantage
Research by Salunke et al., [24], in “B2B” service
companies found that service innovation has an
impact on sustainable competitive advantage.
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Research by Chiu & Yang, [25], found that in
government organizations (public sector) in Taiwan,
Service innovation impacts on competitive
advantage. Meanwhile, Liu, [26], found that in
manufacturing companies, service innovation has a
role and also contributes positively to competitive
advantage. Hong et al., [27], in research in the
banking industry in Malaysia found that service
innovation is used as one of the bank's future
strategies and moves through a "customer centric"
and "service centric" approach. This shows that
service innovation consists of process innovation,
business model innovation, operational innovation,
market innovation, and paradigmatic innovation.
Previously Tsou et al., [28], in a study of 600
information technology service companies found
that service delivery innovations from companies
could create a superior competitive advantage.
Research by Storey & Kahn, [29], found that efforts
to create new services build a sustainable (long-
term) competitive advantage.
H2: There is a significant effect of Service
Innovation on Sustainable Competitive Advantage.
2.3 Entrepreneurial Orientation to Firm
Performance
Research by Nalin et al., [30], found EO has an
impact on company performance. Furthermore,
Fitriati et al., [31], found that EO has an impact on
firm performance through the mediation of dynamic
capabilities. Research by Lim & Kim, [32], found
that EO has an impact on company performance.
Also suggested that companies should implement an
entrepreneurial orientation through “corporate
entrepreneurship”. Research by Oktavio et al., [33],
on hotels in Surabaya found that entrepreneurial
orientation had a positive impact on innovation but
had little impact on company performance.
Research by Hmaidan, [34], on women
entrepreneurs in Nigeria found that entrepreneurial
orientation and market orientation are important
variables for business performance. Kim, [35], finds
that the interaction between entrepreneurial
orientation and dynamic capability has a significant
effect on company performance. Kim, [35], also
concluded that EO and strategic management are
interrelated disciplines. While research by Peris et
al., [36], in the manufacturing sector in Pakistan
found that entrepreneurial orientation has a positive
effect on organizational performance. Research by
Ariasih et al., [37], on the coffee industry in Bali
found that entrepreneurial orientation has a
significant positive impact on company
performance.
H3: There is a significant influence between
Entrepreneurial Orientation (Entrepreneurial
Orientation) on Company Performance (Firm
Performance).
2.4 Service Innovation Towards Firm
Performance
Research by Feng et al., [38], found that service
innovation has an impact on company performance.
Research by Stojčić et al., [39], on hospitality
companies in Croatia found that service innovation
emerged dominantly through the transfer of
knowledge and expertise within the organization,
which ultimately had a positive impact on company
performance. Wu & Nguyen's research, [40], found
that dynamic service innovation has an impact on
service innovation to explore and respond to
customer needs. Tsai & Wang, [41], find that good
innovation and market-oriented capabilities can
significantly improve the performance of service-
oriented companies. Previously, Anning-dorson,
[42], found that service innovation can increase the
level of competitiveness of service companies.
Research by Ryu et al., [43], found that the service
innovation strategy has a positive impact on
company performance through three focus
strategies, namely a focus on service creation, a
focus on service delivery and a focus on interaction
with customers. Research by Wu & Chen, [40],
examines the impact of service innovation on a
firm's financial performance and finds the provision
of management consulting services that gives firms
an edge.
H4: There is a significant influence between Service
Innovation on Firm performance.
2.5 Sustainable Competitive Advantage
against Firm Performance
Songling et al., [44], found that financial and non-
financial support from the government has a
significant impact or influence on sustainable
competitive advantage and company performance.
Furthermore, Na & Kang, [45], found that to
increase sustainable competitive advantage,
“sharing economy” services must actively present
new product ideas, respond quickly to market
demands and actively build new product ideas.
Haseeb, Hussain, & Kot, [46], in a study in
Malaysia found that social and technological
challenges play an important role in increasing
competitive advantage and sustainable business
performance.
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H5: There is a significant effect between
Sustainable Competitive Advantage on Firm
Performance.
2.6 Sustainable Competitive Advantage
Mediates the relationship between Service
Innovation and Firm Performance
Based on the current development of the service
sector, service innovation is a challenge for both
commercial and non-profit enterprises. Due to
global business changes, companies that cannot
compete will lose their competitive advantage which
has an impact on survival, [47]. Hong et al., [27], in
research in the banking industry in Malaysia found
that service innovation is used as one of the bank's
future strategies and moves with a "customer
centric" and "service centric" approach. In addition,
service innovation consists of process innovation,
business model innovation, operational innovation,
market innovation, and paradigmatic innovation.
Service innovation is a determinant of competitive
advantage for the company's long-term survival.
Meanwhile, related to company performance,
Haseeb, Hussain, & Kot, [46], found social and
technological challenges had an impact on
competitive advantage and sustainable business
performance.
H6: There is a significant effect of Service
Innovation on Firm Performance mediated by
Sustainable Competitive Advantage.
3 Method
Researchers take a quantitative approach by
measuring the sample variables built from the
construct and representing the research population.
This research was conducted on the hotel industry in
Indonesia, especially for 3, 4, and 5 star hotels using
a scientific approach or method. To prove and
analyze the hypotheses built through the synthesis
of previous studies, data from several samples are
needed to be tested using statistics. The distribution
of the questionnaire will be done online (via email
and whatsapp), with one time data collection (cross
sectional). Data from the questionnaire will be
tabulated in Excel, for further analysis using SEM-
PLS. The unit of analysis in this study is a company
engaged in accommodation services (hotels) with 3,
4, and 5 stars spread throughout Indonesia, namely
in Bali, West Java, DKI Jakarta, Central Java, East
Java, DI Yogyakarta, Banten, Lombok., Sulawesi,
Kalimantan, Sumatra, while the unit of observation
is the General Manager of the Hotel. This study
adopts the Entrepreneurial Orientation Construct, ,
[48], Service Innovation [8], Company
Performance, [49] and Sustainable Competitive
Advantage, [50]. The questionnaire questions were
designed according to the operationalization of the
variables in the form of a Likert scale of 4 starting
from (1) Strongly Disagree (2) Disagree, (3) Agree
and (4) Strongly Agree.
4 Results and Analysis
Based on the results of a questionnaire from 257
respondents, 227 people (88%) general managers of
hotels in Indonesia are male, while 30 people (12%)
are women. that from a total of 257 respondents
studied, there were eighty-four (33%) respondents
who were over the age of 50 years, one hundred
twenty-six (49%) aged 41-50 years, forty-three
people (17%) aged 31 -40 years, and four people
(1%) were under 30 years old. Most of the
respondents have the latest education Diploma,
either D1, D2 or D3. That is as many as one
hundred and six people (41%), who have the last
education S1 as many as ninety-six people (38%),
respondents who have the last education S2 are
thirty-nine people (15%), who have the last
education of SMA/SMK as many as thirteen people
(5%). Thirty-two people (12%) were respondents
who worked for less than two years. Then as many
as fifty-six people (22%) worked in the category of
2-5 years, then as many as eighty (31%) were in the
category of 5-10 years and as many as eighty-nine
respondents (35%) worked in the category of over
10 years. Of the total 257 people studied, most of
the respondents were one hundred and twelve
people (44%) from the room division, sixty-two
people (24%) from the F&B division, sixty people
(23%) from the sales & marketing division, and The
remaining 8% comes from the HR division,
engineering and other departments.
The outer loading results shown in Table-1 show
that among the 4 variables, 19 factor loading values
are above 0.7. Therefore, 4variables were classified
as sufficient for further analysis. Two invalid factors
were excluded from further analysis.
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Table 1. Convergent Validity Analysis
Factor
Variable
Average
Value
Standard
Deviation
Loading
Factor
Remarks
Entrepre
neurship
Orientation
EO1
4,53
0,745
0,798
Valid
EO2
4,42
0,731
0,801
Valid
EO3
4,38
0,752
0,788
Valid
EO4
4,46
0,688
0,796
Valid
EO5
4,42
0,736
0,836
Valid
EO6
4,10
0,796
0,647
Valid
Service
Innovation
SI1
4,12
0,817
0,807
Valid
SI2
4,07
0,882
0,756
Valid
SI3
4,38
0,752
0,694
Valid
SI4
4,46
0,688
0,767
Valid
SI5
4,42
0,736
0,794
Valid
SI6
4,31
0,753
0,806
Valid
Sustainable
Competitive
Advantage
SCA1
3,90
0,969
0,786
Valid
SCA2
4,05
0,856
0,898
Valid
SCA3
4,06
0,822
0,887
Valid
Firm
performance
FP1
4,31
0,770
0,753
Valid
FP2
4,20
0,719
0,778
Valid
FP3
4,13
0,728
0,883
Valid
FP4
4,09
0,768
0,867
Valid
4.1 Convergent Validity Analysis through
Composite Reliability (CR), and Extracted
Mean Variance (AVE)
The next analysis after the validity test is the
reliability test. The instrument reliability test was
carried out to determine the consistency of the
regularity of the measurement results of an
instrument even though it was carried out at
different times, locations, and populations.
Construct reliability was measured by two different
criteria, namely composite reliability and
Croncbach's Alpha (internal consistency reliability).
Table-2 illustrates that the Composite-Reliability for
all factors are above 0.7, so it can be concluded that
the variables and construct statements are reliable.
The table also shows all Average Variance
Extracted (AVE) values above 0.50 which indicates
that these factors have acceptable convergent
validity.
Table 2. AVE and Composite Reliability
Factors
Composite
Reliability
(C.R.)
A.V.E.
Entrepreneurial
orientation
0,870
0,608
Firm performance
0,838
0,676
Service Innovation
0,864
0,596
Sustainable
Competitive Advantage
0,820
0,737
4.2 Discriminant Validity: Fornell-Larcker
Criteria
If the results of the Fornel-Larcker Criterion
calculation show that the AVE root value of each
construct is greater than the correlation value
between one construct and another, then the
discriminant validity is declared to be good, the
discriminant validity value based on the Fornel-
Lacker Criterion in this research model can be seen
in Table 3 below:
Table 3. Discriminant Validity (Fornell-Larcker
Criteria)
Factors
Entre
preneurial
orientation
Firm
performance
Service
Innovation
Sustainable
Competitive
Advantage
Entre
preneurial
orientation
0,780
Firm
performance
0,674
0,822
Service
Innovation
0,694
0,711
0,772
Sustainable
Competitive
Advantage
0,609
0,719
0,702
0,858
Based on the results of the Fornell-Larcker criterion
test, the square root AVE value on Firm
performance is 0.822 greater than the correlation
value of Firm performance with Entrepreneurial
orientation of 0.674 which indicates that the
discriminant validity value requirements have been
met and can be accepted. Then, the square root AVE
value for Sustainable Competitive Advantage is
0.858 greater than the correlation value for
Sustainable Competitive Advantage with Service
Innovation 0.702, Sustainable Competitive
Advantage with Firm performance 0.719, and
Entrepreneurial orientation with Sustainable
Competitive Advantage , amounting to 0.609. This
shows that the discriminant validity value
requirements have been met and can be accepted.
4.3 Structural Model Evaluation
The structural model was analyzed using the R-
Square value. This helps in identifying the
magnitude of the exogenous variables and at the
same time explaining the endogenous variables. The
calculated R-square values are shown in Table-4.
Table 4. R-Square
Variable
R-Square
Firm performance
0,611
Sustainable Competitive
Advantage
0,495
The R-square value of 0.611 for the resulting
firm performance explains that 61.1% of the
variance is contributed by the constituent variables
of Entrepreneurial orientation, Service Innovation
and Sustainable Competitive Advantage. The
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remaining 37.9% of the variance is explained by
other unknown variables. Similarly, the R-square
value of 0.495 for Sustainable Competitive
Advantage reveals that the resulting factor variance
can be explained by other variables, namely
Entrepreneurial orientation, and Service Innovation
up to 49.5%, while the remaining 50.5% is
contributed by other unknown variables. .
The hypotheses set out in Table-5 are now
analyzed using the t-test and the results are
presented in Table-5. Of the 6 hypotheses tested, 4
null hypotheses were rejected and proved
statistically significant to the factors studied on the
Company's sustainable business growth. In 2 cases,
the null hypothesis cannot be rejected.
Table 5. Hypothesis Test Results
Hypothesis
and Path
Original
Sample
Sample
Mean
Std.
Deviation
T-
Statistic
P-Value
Decision
on Effect
Direct Relationship Hypotheses
H1: EO ->
SCA
-0,093
-0,105
0,139
0,671
0,50
3
Not
Proven
H2: SI ->
SCA
0,785
0,795
0,133
5,898
0,00
0
Effect
Proven
H3: EO ->
FP
0,233
0,227
0,118
1,970
0,04
9
Effect
Proven
H4: SI -> FP
0,193
0,201
0,159
1,214
0,22
5
Effect
Proven
H5: SCA ->
FP
0,442
0,445
0,074
6,006
0,00
0
Effect
Proven
Indirect or Mediating Effect of Working-Conditions Related Hypotheses
H6: SI ->
SCA -> FP
0,347
0,354
0,089
3,909
0,00
0
Effect
Proven
Source: Statistical analysis result
Fig. 1: Pathway result
Based on the pathway results, it shows that the
influence of Entrepreneurial orientation on
sustainable competitive advantage with a p value of
0.503, the effect of Service innovation on
sustainable competitive advantage with a p value of
0.000, the effect of Entrepreneurial orientation on
Company performance with a p value of 0.049, the
effect of Service innovation on Company
performance with a p value of 0.225 , and the effect
of sustainable competitive advantage on company
performance with a p value of 0.000.
4.4 Discussion
4.4.1 Entrepreneurial Orientation Towards
Sustainable Competitive Advantage
It was found that the T-statistical value (0.671) <
1.96 and the original sample value was -0.093
(negative sign). From these results, the hypothesis
which states that Entrepreneurial orientation has a
positive effect on Sustainable Business Growth is
rejected. This is in contrast to the research by
Phapruke Ussahawanitchakit, [51], in Thailand
which found that entrepreneurial orientation has a
significant impact on the competitive level of small
and medium-sized companies sustainable
competitive advantage. One indicator of a
sustainable competitive advantage is the
differentiation and uniqueness of products and
services,[20,21]. In the hotel industry, it is rather
difficult to differentiate in products and services,
almost all hotels sell the same products and services.
The results of this study need to be re-confirmed
with the General Managers to get a more definitive
answer why this hypothesis is rejected, [23].
Entrepreneurial orientation is a key concept as
executives strategize with the hope of doing
something new and taking advantage of
opportunities that other organizations cannot
exploit.
4.4.2 Service Innovation towards Sustainable
Competitive Advantage
The t statistic was found to be (5.898) > 1.96, and
the original sample value was 0.785 (positive sign).
These results support the hypothesis that service
innovation has a positive effect on the SCD.
Previously Tsou et al., [28], in a study of 600
information technology service companies found
that service delivery innovations from companies
could create a superior competitive advantage.
Research by Storey & Kahn, [29], found that
“efforts to create new services build a sustainable
(long-term) competitive advantage.” Analysis of the
role of service innovation in influencing sustainable
competitive advantage in the hospitality industry,
Accepted. Service innovation is the introduction of
new service-focused ideas that provide new ways of
delivering benefits, new service concepts, or new
service business models through continuous
operational improvements, technology, investments
in employee performance, or customer experience
management, [27], [29]. The explanation of why
service innovation affects sustainable competitive
advantage is because according to Barney, one of
the most difficult competitive advantage to imitate
is people. The hospitality industry is an industry that
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is done by humans for humans, so that service
innovations carried out by humans will be a
competitive advantage or advantage to compete
sustainably, for an organization. Based on this, it
shows that one of the success factors in maintaining
good company performance is having service
innovation that has been implemented for quite a
long time by hotels managed in a network before the
pandemic took place together with the
implementation of sustainable competitive
advantage.
4.4.3 Entrepreneurial Orientation to Firm
Performance
The t statistic is found to be (1.970) > 1.96, and the
original sample value was 0.233 (positive sign).
These results support the hypothesis that EO has a
positive impact on firm performance. Previously
Fitriati et al., [31], who conducted research in
Malaysia found that entrepreneurial orientation has
a more significant effect on company performance
in central government-owned companies than
regional government-owned companies. Research
by Ariasih et al., [37], found that the relationship
between entrepreneurial orientation and firm
performance could be mediated by different strategy
variables and innovation performance. Research by
Ariasih et al., [37], in Austria found that both
market orientation and entrepreneurial orientation
have a positive impact on performance in emerging
markets. Meanwhile, research by Kim, [35], in
Austria found a significant positive relationship
between entrepreneurial orientation and “corporate”
performance by emphasizing “innovative behavior”
as the most important sub-dimension. While the
indicators used to measure entrepreneurial
orientation are, the policy in delegation is also the
freedom to build ideas. When focusing its targets on
revenue, GOP, occupancy and market share, para-
GM concentrates more on day to day operations, so
that entrepreneurial orientation becomes the next
choice, if the above targets have been achieved.
4.4.4 Service Innovation towards Firm
Performance
The t-statistic was found to be (1.214) < at 1.96, the
original sample value was 0.193 (positive sign).
Based on these results, the hypothesis that service
innovation has a positive impact on firm
performance is rejected. Furthermore, Anning-
dorson, [42], also makes a framework of two aspects
of the impact of service innovation, namely cost
reduction through changes in internal business
processes and training improvements for customer
satisfaction. Research by Chen et al., [16], found
that managers should pay particular attention to how
service delivery innovation fits into the “service
channel” to allow all aspects of innovation to
interact to achieve superior firm performance. While
the company's performance in this study looks more
at revenue, GOP, occupancy and market share, so
that service innovation is not the main focus of
GM's daily targets. As described in the two
dimensions of sustainable competitive advantage,
namely product and service strategy and cost and
growth (growth) strategy, it can be interpreted that
sustainable competitive advantage depends on the
strategy taken by stakeholders in the hospitality
industry.
4.4.5 Sustainable Competitive Advantage against
Firm Performance
It was found that the T-statistical value (6.006) >
1.96 and the original sample value was 0.251
(positive sign). From these results, the hypothesis
which states that Service Innovation has a positive
effect on Firm Performance is accepted. Haseeb,
Hussain, & Kot, [46], stated that “a strong
reputation in the community can be a wealth for
companies, especially in times of crisis.” In
addition, the positive credibility of the company can
influence policy makers and have other positive
impacts: increasing employee satisfaction and
loyalty, as well as improving the financial
performance and competitiveness of the company.
In addition to increasing stakeholder loyalty, GCG
practices can build genuine relationships between
companies and stakeholders, increase employee
satisfaction and motivation, increase the company's
ability to provide positive responses, thereby
increasing performance and creating competitive
advantage ,[45]. The results of hypothesis testing
the effect of sustainable competitive advantage on
performance companies in the hotel industry, using
SEM PLS states that sustainable competitive
advantage has an influence on company
performance. As described in the two dimensions of
sustainable competitive advantage, namely product
and service strategy and cost and growth strategy, it
can be interpreted that sustainable competitive
advantage depends on the strategies taken by
stakeholders in the hotel industry both practically
and financially. it can be seen that these aspects
affect the company's performance in terms of net
income, gross profit and occupancy rate.
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4.4.6 Sustainable Competitive Advantage
Mediates the Relationship between Service
Innovation and Firm Performance
It was found that the T-statistical value (3.909) >
1.96 and the original sample value was 0.347
(positive sign). From these results, the hypothesis
which states that Sustainable Competitive
Advantage is proven to be able to mediate the
relationship between Service Innovation and Firm
Performance received. Service innovation is defined
as the introduction of new service-focused ideas that
provide new ways of delivering benefits, new
service concepts, or new service business models
through continuous operational improvements,
technology, investments in employee performance,
or customer experience management, [27]. Service
innovation has a positive effect on hotel business
performance. This study contributes to practice by
helping hotel managers to design the right service
innovation strategy and make the right
decisions,[46]. Service innovation is defined as the
introduction of new service-focused ideas that
provide new ways of delivering benefits, new
service concepts, or new service business models
through continuous operational improvement,
technology, investment in employee performance,
or managing the customer experience.
5 Conclusion
Based on the analysis and discussion above, it
shows that Entrepreneurial orientation has no effect
on Sustainable Business Growth, Service Innovation
has a positive effect on Sustainable Business
Growth, Entrepreneurial Orientation has a positive
effect on Firm Performance, Service Innovation has
no positive effect on Firm Performance, Service
Innovation has a positive effect on Firm
Performance and Sustainable Competitive
Advantage is proven to be able to mediate the
relationship between Service Innovation and Firm
Performance.
This study also clearly shows the reasons for
customers to choose hotels, namely location and
service so that owners can choose the right/strategic
location. The General Manager can maximize
profits for hotels that have strategic locations and
improve service quality, including innovating in
service. This research also shows General Managers
to find out the priorities expected by superiors from
General Managers or Owners, namely profits,
growth and market share.
Researchers hope that the results of this study
can be used as material for consideration by the
government as a regulator or regulator to pay
attention to the growth in the number of hotels and
star categories in each region to avoid excess
supply/room supply (over supply). This can be done
by paying attention to the growth rate of supply
(supply) of hotel rooms and demand (demand) of
hotel rooms both during normal conditions and
during abnormal conditions such as a pandemic.
The limitation of this study is that this study uses
SEM. The weakness of PLS is its focus on
prediction rather than explanation. As Earlie notes,
this is a difficult concept to grasp, but it is reflected
in the fact that PLS will find a solution when SEM
will fail. But the important consideration here is that
we must understand what the results mean and how
to interpret them.
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Contribution of Individual Authors to the
Creation of a Scientific Article (Ghostwriting
Policy)
I Nyoman Sarya is the main author of this article
and also plays a role in analyzing the statistical data
generated in this study.
MTS. Arief is an expert in the field of research
management, he is very helpful in providing input
and input in this research so that it can produce
quality research.
Hardijanto Saroso is an expert in the field of
economics and research management, she is also an
expert in the field of economics so she is very
instrumental in providing input on the use of
theories in this research in order to produce quality
research.
Agustinus Bandur is an expert in input research
methodology; he plays a role in providing input and
in this research so that it can produce quality
research.
Sources of Funding for Research Presented in a
Scientific Article or Scientific Article Itself
All funding in this study came from private funding.
Creative Commons Attribution License 4.0
(Attribution 4.0 International, CC BY 4.0)
This article is published under the terms of the
Creative Commons Attribution License 4.0
https://creativecommons.org/licenses/by/4.0/deed.en
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