Digital strategy for improving resilience of micro, small, and medium enterprises

Authors

DOI:

https://doi.org/10.30656/jsmi.v7i1.6087

Keywords:

Clustering, Craft industry, Digital marketing, Small and medium enterprises, Strategy

Abstract

The COVID-19 pandemic impacted several small and medium-sized enter­prises (SMEs) in Indonesia. The viability of some SMEs' business opera­tions was disturbed, especially those who create non-essential goods like carving. The sales have decreased by up to sixty per cent, causing reduced levels of income and the termination of numerous workers. SMEs in Indonesia are highly considered because businesses are one of the country's most significant economic contributors. This research proposes a strategy for SMEs to improve the resilience of business operations of the SMEs. The K-means method was used to investigate three groups of SMEs: micro, small, and medium. Changes in the SME class before and after the pandemic are investigated through changes in the values of the variables in the SME profile. Then the SWOT method is used to identify internal and external factors with the highest weight, which can be used as a basis for developing strategies to increase the resilience of SMEs. Furthermore, the TOPSIS method determines the best plan for dealing with the new digital era. The result shows that the W-T strategy to utilize social media can be prioritized based on the criteria that significantly impact SMEs' product sales and business resilience.

References

A. R. Che Omar, S. Ishak, and M. A. Jusoh, ‘The impact of Covid-19 Movement Control Order on SMEs’ businesses and survival strategies’, Malaysian J. Soc. Sp., vol. 16, no. 2, pp. 139–150, May 2020, doi: https://doi.org/10.17576/geo-2020-1602-11.

T. Nyanga and H. Zirima, ‘Reactions of Small To Medium Enterprises in Masvingo, Zimbabwe To Covid 19: Implications on Productivity’, Bus. Excell. Manag., vol. S.I., no. 1, pp. 22–32, 2020, doi: https://doi.org/10.24818/beman/2020.s.i.1-02.

J. Sheth, ‘Business of business is more than business: Managing during the Covid crisis’, Ind. Mark. Manag., vol. 88, no. May, pp. 261–264, Jul. 2020, doi: https://doi.org/10.1016/j.indmarman.2020.05.028.

N. F. Fabeil, K. H. Pazim, and J. Langgat, ‘The Impact of Covid-19 Pandemic Crisis on Micro-Enterprises: Entrepreneurs’ Perspective on Business Continuity and Recovery Strategy’, J. Econ. Bus., vol. 3, no. 2, pp. 837–844, Jun. 2020, doi: https://doi.org/10.31014/aior.1992.03.02.241.

S. Susilawati, R. Falefi, and A. Purwoko, ‘Impact of COVID-19’s Pandemic on the Economy of Indonesia’, Budapest Int. Res. Critics Inst. Humanit. Soc. Sci., vol. 3, no. 2, pp. 1147–1156, May 2020, doi: https://doi.org/10.33258/birci.v3i2.954.

J. Alves, L. Tan Cheng, L. YuBo, and H. Wei, ‘Crisis Management for Small Business during the COVID-19 Outbreak: Survival, Resilience and Renewal Strategies of Firms in Macau’, Res. Sq., no. June, pp. 1–29, 2020, [Online]. Available: https://www.researchsquare.com/article/rs-34541/v1.

J. Jumadi, ‘The Influence of Spiritual, Emotional and Intellectual Intelligence toward Performance SMEs in The COVID-19 Pandemic’, J. Xi’an Univ. Archit. Technol., vol. XII, no. V, pp. 3371–3379, May 2020, doi: https://doi.org/10.37896/JXAT12.05/1758.

M. S. Rizwan, G. Ahmad, and D. Ashraf, ‘Systemic risk: The impact of COVID-19’, Financ. Res. Lett., vol. 36, no. May, p. 101682, Oct. 2020, doi: https://doi.org/10.1016/j.frl.2020.101682.

E. W. Liguori and T. G. Pittz, ‘Strategies for small business: Surviving and thriving in the era of COVID-19’, J. Int. Counc. Small Bus., vol. 1, no. 2, pp. 106–110, Apr. 2020, doi: https://doi.org/10.1080/26437015.2020.1779538.

M. Cowling, R. Brown, and A. Rocha, ‘Did you save some cash for a rainy COVID-19 day? The crisis and SMEs’, Int. Small Bus. J. Res. Entrep., vol. 38, no. 7, pp. 593–604, Nov. 2020, doi: https://doi.org/10.1177/0266242620945102.

Lembaga Pengembangan Perbankan Indonesia, ‘Profil Bisnis Usaha Mikro, Kecil Dan Menengah (UMKM)’, 2015. [Online]. Available: https://www.bi.go.id/id/umkm/penelitian/Documents/Profil%20Bisnis%20UMKM.pdf.

A. Susanty, N. B. Puspitasari, A. Bakhtiar, and F. Prasetya, ‘Assessing the impact of the COVID-19 pandemic on small and medium-sized enterprises performance’, Front. Psychol., vol. 13, no. October, pp. 1–22, 2022, doi: https://doi.org/10.3389/fpsyg.2022.927628.

H. Taan, S. Sultan, and H. Hasniaty, ‘Micro, Small and Medium Enterprises (SMEs) and Great Opportunities to Return After the Covid Pandemic in Makassar City’, Int. J. Artif. Intell. …, vol. 6, no. 1, pp. 1–8, 2022, [Online]. Available: http://www.ijair.id/index.php/ijair/article/view/788.

M. Z. Hossain, M. N. Akhtar, R. B. Ahmad, and M. Rahman, ‘A dynamic K-means clustering for data mining’, Indones. J. Electr. Eng. Comput. Sci., vol. 13, no. 2, p. 521, Feb. 2019, doi: https://doi.org/10.11591/ijeecs.v13.i2.pp521-526.

J. Wang and Z. Wang, ‘Strengths, Weaknesses, Opportunities and Threats (SWOT) Analysis of China’s Prevention and Control Strategy for the COVID-19 Epidemic’, Int. J. Environ. Res. Public Health, vol. 17, no. 7, p. 2235, Mar. 2020, doi: https://doi.org/10.3390/ijerph17072235.

A. Zadeh Sarraf, A. Mohaghar, and H. Bazargani, ‘Developing TOPSIS method using statistical normalization for selecting knowledge management strategies’, J. Ind. Eng. Manag., vol. 6, no. 4, pp. 860–875, Sep. 2013, doi: https://doi.org/10.3926/jiem.573.

M. S. Rahman, F. A. AbdelFattah, S. Bag, and M. O. Gani, ‘Survival strategies of SMEs amidst the COVID-19 pandemic: application of SEM and fsQCA’, J. Bus. Ind. Mark., vol. 37, no. 10, pp. 1990–2009, Oct. 2022, doi: https://doi.org/10.1108/JBIM-12-2020-0564.

A. Susanty, N. B. Puspitasari, and A. Fachreza, ‘Measuring the performance of SMEs during the pandemic situation using system dynamic’, Kybernetes, no. 185, Apr. 2023, doi: https://doi.org/10.1108/K-09-2022-1206.

V. Pratama, I. Santoso, and S. A. Mustaniroh, ‘Development strategy of SMEs in the new normal era of coronavirus disease 2019 (COVID-19): A literature review’, IOP Conf. Ser. Earth Environ. Sci., vol. 733, no. 1, p. 012058, Apr. 2021, doi: https://doi.org/10.1088/1755-1315/733/1/012058.

A. Dading Gunadi, H. Lesmana, H. Fachrizah, M. D. Revindo, & Rama, and V. Daniswara, ‘Dealing with the COVID-19 Pandemic in Indonesia: MSMEs’ Coping Strategy, Recovery Path, and Business Transformation’, J. Ekon. Indones., vol. 11, no. 1, pp. 25–62, 2022, [Online]. Available: https://jurnal.isei.or.id/index.php/isei/article/view/195/57.

M. N. Utomo, I. Ariska, S. R. Pratiwi, and Kaujan, ‘Strategies for Maintaining SMEs Performance During Covid-19 Pandemic’, Int. J. Soc. Sci. Bus., vol. 5, no. 1, pp. 34–43, 2021, [Online]. Available: https://ejournal.undiksha.ac.id/index.php/IJSSB/article/view/30613.

U. Hani, I. N. Rachmania, S. Setyaningsih, and R. C. Putri, ‘Patterns of Indonesian Women Entrepreneurship’, Procedia Econ. Financ., vol. 4, no. Icsmed, pp. 274–285, 2012, doi: https://doi.org/10.1016/S2212-5671(12)00342-5.

Pemerintah Republik Indonesia, UU No 20 tahun 2008 tentang UMKM. 2008, Online]. Available: https://peraturan.bpk.go.id/Home/Details/39653/uu-no-20-tahun-2008.

K. Schaefer, P. D. Corner, and K. Kearins, ‘Social, Environmental and Sustainable Entrepreneurship Research’, Organ. Environ., vol. 28, no. 4, pp. 394–413, Dec. 2015, doi: https://doi.org/10.1177/1086026615621111.

M. H. Kamaludin, N. A. Aziz, I. A. Majid, M. H. Kamaludin, M. Saad, and N. A. Aziz, ‘Sustainability – Driven Entrepreneurship : The Mediating Effect of Opportunity-Based Management Structure on the Relationship between Entrepreneurial Orientation and Environmental Sustainability Management of SMEs : A Conceptual Framework’, Eur. J. Bus. Manag., vol. 4, no. 13, pp. 148–156, 2012, [Online]. Available: https://www.iiste.org/Journals/index.php/EJBM/article/view/2713.

P. Soto-Acosta, D.-M. Cismaru, E.-M. Vătămănescu, and R. Ciochină, ‘Sustainable Entrepreneurship in SMEs: A Business Performance Perspective’, Sustainability, vol. 8, no. 4, p. 342, Apr. 2016, doi: https://doi.org/10.3390/su8040342.

A. Shahzad, R. Hassan, N. I. Abdullah, A. Hussain, and M. Fareed, ‘COVID-19 impact on e-commerce usage: An empirical evidence from malaysian healthcare industry’, Humanit. Soc. Sci. Rev., vol. 8, no. 3, pp. 599–609, May 2020, doi: https://doi.org/10.18510/hssr.2020.8364.

V. S. Moertini, ‘Small Medium Enterprises: On Utilizing Business-to-Business e-Commerce to Go Global’, Procedia Econ. Financ., vol. 4, no. Icsmed, pp. 13–22, 2012, doi: https://doi.org/10.1016/S2212-5671(12)00316-4.

A. Leckel, S. Veilleux, and L. P. Dana, ‘Local Open Innovation: A means for public policy to increase collaboration for innovation in SMEs’, Technol. Forecast. Soc. Change, vol. 153, no. December 2019, p. 119891, Apr. 2020, doi: https://doi.org/10.1016/j.techfore.2019.119891.

N. T. Dung, N. M. Tri, and L. N. Minh, ‘Digital transformation meets national development requirements’, Linguist. Cult. Rev., vol. 5, no. S2 SE -, pp. 892–905, Oct. 2021, doi: https://doi.org/10.21744/lingcure.v5nS2.1536.

A. I. Sulaiman, B. Suswanto, and R. Windiasih, ‘The Economic Empowerment Through Entrepreneurship and Cooperatives for the Harmonization in Society’, Humanit. Soc. Sci. Res., vol. 2, no. 3, pp. 1–15, Sep. 2019, doi: https://doi.org/10.30560/hssr.v2n3p15.

S. Indarti, ‘The effects of education and training, management supervision on development of entrepreneurship attitude and growth of small and micro enterprise’, Int. J. Organ. Anal., vol. 29, no. 1, pp. 16–34, Jan. 2021, doi: https://doi.org/10.1108/IJOA-09-2019-1890.

M. Shafi, J. Liu, and W. Ren, ‘Impact of COVID-19 pandemic on micro, small, and medium-sized Enterprises operating in Pakistan’, Res. Glob., vol. 2, p. 100018, Dec. 2020, doi: https://doi.org/10.1016/j.resglo.2020.100018.

R. Brown, A. Rocha, and M. Cowling, ‘Financing entrepreneurship in times of crisis: Exploring the impact of COVID-19 on the market for entrepreneurial finance in the United Kingdom’, Int. Small Bus. J. Res. Entrep., vol. 38, no. 5, pp. 380–390, Aug. 2020, doi: https://doi.org/10.1177/0266242620937464.

F. Alani Lawal, R. E. Worlu, and O. E. Ayoade, ‘Critical Success Factors for Sustainable Entrepreneurship in SMEs: Nigerian Perspective’, Mediterr. J. Soc. Sci., vol. 7, no. 3, pp. 338–346, May 2016, doi: https://doi.org/10.5901/mjss.2016.v7n3s1p338.

F. Fitriasari, ‘How do Small and Medium Enterprise (SME) survive the COVID-19 outbreak?’, J. Inov. Ekon., vol. 5, no. 02, pp. 53–62, Apr. 2020, doi: https://doi.org/10.22219/jiko.v5i3.11838.

M. E. David, F. R. David, and F. R. David, ‘The Quantitative Strategic Planning Matrix (Qspm) Applied To a Retail Computer Store’, Coast. Bus. J., vol. 8, no. 1, pp. 42–52, 2009, [Online]. Available: https://digitalcommons.coastal.edu/cbj/vol8/iss1/4/.

D. Lestari, S. Zainurossalamia ZA, S. Maria, W. Wardhani, and R. Yudaruddin, ‘The impact of COVID-19 pandemic on performance of small enterprises that are e-commerce adopters and non-adopters’, Probl. Perspect. Manag., vol. 19, no. 3, pp. 467–477, Sep. 2021, doi: https://doi.org/10.21511/ppm.19(3).2021.38.

Downloads

Published

2023-06-30

Issue

Vol. 7 No. 1 (2023): June

Section

Research Article

License

All articles in Jurnal Sistem dan Manajemen Industri can be disseminated provided they include the identity of the article and the source of the article Jurnal Sistem dan Manajemen Industri. The publisher is not responsible for the contents of the article. The content of the article is the sole responsibility of the author

Creative Commons License

Jurnal Sistem dan Manajemen Industri is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.

How to Cite

[1]
“Digital strategy for improving resilience of micro, small, and medium enterprises”, j. sist. manaj. ind., vol. 7, no. 1, pp. 43–52, Jun. 2023, doi: 10.30656/jsmi.v7i1.6087.
Crossref
Scopus
Google Scholar
Europe PMC

Similar Articles

1-10 of 35

You may also start an advanced similarity search for this article.