Malaysia- Indonesia International Conference on Economics, Management and Accounting 2010
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Import 6
Some areas are still vulnerable to disasters such as floods and landslides
0,09 3
0,27 Amount
0,50 1,26
Total 1,00
2,75
Table 2 shows, that the score 1.49is higher than the threat score 1.26 and total score is 2.75 or more than average scores lowest score is 1.0 and the highest is 4.0 .
Its means the SMIs in Central Java respond positive for the opportunities and threats. In other thing, IKM strategies effectively exploit opportunities and minimize potential
negative effects from external threats.
4.2. Measurement of SMI s Competitiveness and Performance
The determination of the SMIs competitiveness use an index based on the framework of Porters diamond model. The values of the index describe the status of the SMI
competitiveness. The result of competitiveness index can be shown in the following table.
Table 3: Results of the SMI competitiveness index in Central Java
No. Dimensions and Elements of Industrial Competitiveness
Competitiveness Index
I. Dimensions of Condition Factor
73,66
1. Cost per unit of product
5,60 2.
Source of Raw Materials 14,30
3. Source of Capital
4,57 4.
Source of Labor 14,53
5. Location
16,58 6.
Knowledge 6,63
7. Technology
11,43 II.
Dimensions of Demand Conditions 69,17
1. Target Market
31,07 2.
Market Access 17,29
3. Sales Growth
20,80 III.
Dimensions of Corporate Strategy and Structure of Competition
61,25
1. Product Adaptation
8,37 2.
Flexibility 8,43
3. Competitive strategy
13,70 4.
Managerial Ability 5,29
5. Threat of new entrants
12,77 6.
Product Innovations 12,69
IV. Dimensions of Supporting and Related Industries
59,61
1. Financial Institutions
14,20 2.
Transportation Service Company 10,98
3. Providers of Raw Materials
13,12 4.
Marketing Intermediaries 9,33
5. Information companies
11,98
Total Dimension 264,18
Source: Primary Data 2009. processed Based on the table 3, the SMIs competitiveness in Central Java has a high index value
264.18. While in the dimension ratings, the highest competitiveness index value is
Malaysia- Indonesia International Conference on Economics, Management and Accounting 2010
1812 dimension of condition factors, that is equal to 73.66. It happens because most of the
SMI uses raw materials and local labor, technology or appropriate type of equipment, and located outside the city. Nevertheless the competitiveness index value is low. The
costs per unit of product 5.60; sources of capital 4.57 and knowledge 6.63. This problem occurs because the scale of production is low, most employers use a mix of
capital itself, the amount of capital is very limited, and formal education level of entrepreneurs is low. Therefore, to improve cost efficiency per unit of product, the
company needs to 1 purchase materials jointly with other companies through a cooperative, 2 encourage employers to get the higher education, and 3 improve
scale production based on market demand opportunities.
Among all of the dimensions, the dimensions of supported and related industries have the lowest competitiveness index is 59.61. This is due to elements of marketing
intermediaries have a low competitiveness index 9.33. The low of marketing intermediary elements competitiveness caused by the most employers distribute their
products directly to the consumers. In case, the directly distribution of their products made their distribution cost are inefficient and the ability to reach consumers is very
limited. Thus, the SMI should cooperate with the intermediary to improve competitiveness in the market.
The competitiveness index value of adaptation, flexibility, and managerial ability elements on the dimensions of corporate strategy and structure of competition is low.
This is due to the level of experience, type of equipment used, and the level of formal education possessed entrepreneurs is relatively low. In order to get the high SMIs
competitiveness and performance, the employer must be responsive to any changes, use a multifunctional type of equipment, and improve the quality of self through a
program of formal education or training.
Furthermore, the measurement of the SMIs performance based on return on investment ROI, return on equity ROE, and the sales growth rate. The
performance measurement results that the average ROI is 20.96, ROE is 25.90, and sales growth is 7.51. Thus, It means that the SMIs performance in Central Java
is good and consistent with the high level of competitiveness. To determine the relationship between SMI performance variables, this research uses Pearson
correlation as below:
Table 4. Pearson Correlations
C or r elatio ns
TUMPA S ROE1
ROI TUMPA S
Pearson Correlation Sig. 2-tailed
N 1
. 394
,484 ,000
394 ,464
,000 394
ROE1 Pearson Correlation
Sig. 2-tailed N
,484 ,000
394 1
. 394
,727 ,000
394 ROI
Pe arson Correlation Sig. 2-tailed
N ,464
,000 394
,727 ,000
394 1
. 394
. Correlation is s ignif icant at the 0.01 lev el 2-tailed.
Malaysia- Indonesia International Conference on Economics, Management and Accounting 2010
1813 From table 4 can be analyzed the relationship or correlation between the components
of SMI performance. The results indicate the existence of correlation between variables of SMI performance. It can be shown by the number of sig. 2-tailed less
than 0.000. Component Matrix uses to know, how much the relationship between variables of SMIs performance in Central Java. The result using Component Matrix
Table as follows:
Table 5: Component Matrix
Component TUMPAS
,746 ROI
,882 ROE
,890 Extraction Method: Principal Component Analysis.
a 1 components extracted. Source: data processed SPSS.16.00
From the table 5, the component of return on equity ROE is the most effect factor on the SMI performance. All of variables have effected on the SMI performance. Based
on the findings, the research uses the workers to improve SMI s performance. Return
on Equity ROE shows the most dominant variable in shaping the SMI performance. Another variables need evaluation and improvement of services, so the service quality
at retail hypermarkets was received well by consumers.
4.3. The SMI Empowerment To Increase Competitiveness and Performance.
