COMPETITIVE STRATEGY MODEL AND ITS IMPACT ON MICRO BUSINESS UNIT OF LOCAL DEVELOPMENT BANKS IN JAWA

Abstract

This study aims to analyze the factors that determine how a bank can successfully improve its
competitive strategy in working on MSME credit and lead to the positive performance of the
bank's micro business unit at the Regional Development Bank (BPD) in Java. The determinants
of the competitive strategy in this study are unique capabilities, dynamic capabilities,
organizational culture, market orientation and business partnerships. Then it will analyze the
determinants of the performance of the bank's micro business unit. The sample was taken as
many as 227 bank micro business units distributed to BPDs in Java with a proportional
allocation based on the population of micro business units in each BPD and taken randomly
(simple random sampling).
The results show that dynamic capabilities, organizational culture, core competencies, market
orientation and business partnerships have a positive and significant effect on business strategy.
Business strategy and dynamic capabilities have a positive and significant effect on the
performance of the bank's micro business unit. Business strategy and dynamic capabilities have
a positive and significant effect on performance of the bank's micro business unit.
The novelty of the research reveals that the application of dynamic capabilities, organizational
culture, business partnerships and market orientation provide new concepts in the management
and development of a strong bank micro business unit that provides confidence that the survival
of a bank will be maintained throughout the ages.