Entrepreneurial Orientation, Market Orientation, and SME Performance: The Mediating Effect of Cost Leadership Strategy During the COVID-19 Pandemic

Abstract

Business performance reflects the success or failure of an organization in carrying out its main duties and functions to achieve its goals, targets, and objectives. Therefore, companies need to pay attention to factors that influence their performance. The purpose of this study was to determine the mediating effect of cost leadership strategy on the relationship between entrepreneurial orientation, market orientation, and SME performance. The object of this research was laundry SMEs in Semarang City, with a total sample of 100 laundry SMEs. Data were collected using a probability sampling method and analyzed using path analysis. The results showed that market orientation and entrepreneurial orientation have a positive and significant effect on cost leadership strategy. Furthermore, market orientation, entrepreneurial orientation, and cost leadership strategy have a positive and significant effect on the performance of laundry SMEs. Cost leadership strategy was also proven to mediate the influence of entrepreneurial orientation and market orientation on the performance of laundry SMEs in Semarang City.