Effect of social-media marketing capability and competitive advantage on firm performance: Moderating role of differentiation and cost leadership strategy (Studies on MSMEs Batik in Central Java Indonesia)

Abstract

This study aims to examine the moderating effect of Differentiation Strategy (DS) and Cost Leadership Strategy (CLS) on the relationship between Social Media Marketing Capability (SMMC), Competitive Advantage (CA), and Firm Performance (FP). The study was conducted with a focus on Batik MSMEs in Central Java, Indonesia, with a sample of 200 MSMEs across Batik industrial centers in Surakarta, Pekalongan, Rembang, and Pati. Data were analyzed using Smart PLS 4. Findings indicate that SMMC has a positive effect on CA, and CA, in turn, positively affects FP. CA was proven to mediate the relationship between SMMC and FP. Furthermore, DS significantly strengthens the relationship between SMMC and CA, as well as the relationship between CA and FP. Conversely, CLS was shown to weaken the relationship between SMMC and CA but did not moderate the relationship between CA and FP.