Email this article 
Building small medium enterprise competitive advantage through situational leadership, digital marketing capabilities and innovation
(1) Universitas Negeri Makassar
(2) Universitas Negeri Makassar
(3) Universitas Negeri Makassar
(4) Universitas Negeri Makassar
(5) Universitas Negeri Makassar
(*) Corresponding Author
Abstract
Small and medium enterprises increasingly need adaptive leadership and digital marketing capabilities to sustain competitiveness in dynamic digital markets. This study examines the influence of situational leadership and digital marketing capability on sustainable competitive advantage among SMEs in Makassar, with digital marketing innovation positioned as a mediating variable. Data were collected from 304 SME owners through a structured questionnaire and analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM). The findings reveal that situational leadership and digital marketing capability significantly enhance digital marketing innovation, with situational leadership emerging as the stronger determinant. Digital marketing innovation and situational leadership were found to exert significant positive effects on sustainable competitive advantage, while digital marketing capability showed no significant direct effect on competitive outcomes. Mediation analysis confirmed that digital marketing innovation significantly mediates both the relationship between digital marketing capability and situational leadership to sustainable competitive advantage. These results suggest that digital marketing capability functions as a strategic prerequisite rather than a direct driver of competitive advantage, and that its value is only realized when actively transformed into innovative marketing practices. The study contributes to the dynamic capabilities literature and extends situational leadership theory by demonstrating that adaptive leadership and digital capabilities must be channeled through innovation to generate sustainable competitive value in resource-constrained SME environments.
Keywords
Full Text:
PDFReferences
Al Madani, A. S., & Adawiyah, R. (2024). Digital Marketing Innovation by Utilizing Information Systems for Business Success. 1st Antasari Conference of Islamic Economics and Business 2024.
AlKoliby, I. S. M., Abdullah, H. H., & Suki, N. M. (2024). Linking Knowledge Application, Digital Marketing, and Manufacturing SMEs’ Sustainable Performance: The Mediating Role of Innovation. Journal of the Knowledge Economy, 15(2), 6151–6177. https://doi.org/10.1007/s13132-023-01157-4
Aprilia, N., Subroto, W. T., & Sakti, N. C. (2024). The Role of Small and Medium Enterprises (SMEs) in Supporting the People’s Economy in Indonesia. International Journal of Research and Scientific Innovation (IJRSI), 11. https://doi.org/10.51244/IJRSI
Cai, Q., Wu, J., Wu, T., Chang, P.-C., & Mardani, A. (2024). The impact of digital leadership on hidden champions’ competitive advantage: A moderated mediation model of ambidextrous innovation and value co-creation. Journal of Business Research, 182, 114819. https://doi.org/https://doi.org/10.1016/j.jbusres.2024.114819
Canhoto, A. I., Quinton, S., Pera, R., Molinillo, S., & Simkin, L. (2021). Digital strategy aligning in SMEs: A dynamic capabilities perspective. The Journal of Strategic Information Systems, 30(3), 101682. https://doi.org/https://doi.org/10.1016/j.jsis.2021.101682
Chaffey, D., & Ellis-Chadwick, F. (2022). Digital Marketing: Strategy, Implementation, and Practice. In Pearson. Pearson.
Del Pino-Marchito, A., Galán-García, A., & Plaza-Mejía, M. de los Á. (2025). The Hersey and Blanchard’s Situational Leadership Model Revisited: Its Role in Sustainable Organizational Development. World, 6(2), 63. https://doi.org/10.3390/world6020063
D’souza, C., Nanere, M., Marimuthu, M., Arwani, M., & Nguyen, N. (2021). Market orientation, performance and the mediating role of innovation in Indonesian SMEs. Asia Pacific Journal of Marketing and Logistics, 34(10), 2314–2330. https://doi.org/10.1108/APJML-08-2021-0624
Erhan, T., Uzunbacak, H. H., & Aydin, E. (2022). From conventional to digital leadership: exploring digitalization of leadership and innovative work behavior. Management Research Review, 45(11), 1524–1543. https://doi.org/10.1108/MRR-05-2021-0338
Fornell, Claes, & Larcker, David F. (1981). Evaluating Structural Equation Models with Unobservable Variables and Measurement Error. Journal of Marketing Research, 18(1), 39–50. https://doi.org/10.1177/002224378101800104
Hair, J., & Alamer, A. (2022). Partial Least Squares Structural Equation Modeling (PLS-SEM) in second language and education research: Guidelines using an applied example. Research Methods in Applied Linguistics, 1(3), 100027. https://doi.org/https://doi.org/10.1016/j.rmal.2022.100027
Hair, J. F., Hult, G. T. M., Ringle, C. M., & Sarstedt, M. (2017). A Primer on Partial Least Squares Structural Equation Modeling ( PLS-SEM ) (2nd ed.). Sage Publications.
Hazzam, J., Dobson, P., Singh, B., Ibrahim, B., & Aljarah, A. (2025). Digital marketing capabilities and SME performance: the influence of market orientation and the complementarity effect on customer relationship management capabilities. Journal of Research in Marketing and Entrepreneurship, 28(1–2), 1–21. https://doi.org/10.1108/JRME-02-2025-0029
Henseler, J., Ringle, C. M., & Sarstedt, M. (2015). A new criterion for assessing discriminant validity in variance-based structural equation modeling. Journal of the Academy of Marketing Science, 43(1), 115–135. https://doi.org/10.1007/s11747-014-0403-8
Hersey, P., Blanchard, K. H., & Johnson, D. E. (2013). Management of Organizational Behavior: Leading Human Resources. Pearson.
Homburg, C., & Wielgos, D. M. (2022). The value relevance of digital marketing capabilities to firm performance. Journal of the Academy of Marketing Science, 50(4), 666–688. https://doi.org/10.1007/s11747-022-00858-7
Hussein, H., Albadry, O. M., Mathew, V., Al-Romeedy, B. S., Alsetoohy, O., Abou Kamar, M., & Khairy, H. A. (2024). Digital Leadership and Sustainable Competitive Advantage: Leveraging Green Absorptive Capability and Eco-Innovation in Tourism and Hospitality Businesses. Sustainability (Switzerland) , 16(13). https://doi.org/10.3390/su16135371
Kementerian Koordinator Bidang Perekonomian Republik Indonesia. (2021). UMKM Menjadi Pilar Penting dalam Perekonomian Indonesia. Https://Ekon.Go.Id. https://ekon.go.id/publikasi/detail/2969/umkm-menjadi-pilar-penting-dalam-perekonomian-indonesia?
Kementerian Koordinator Bidang Perekonomian Republik Indonesia. (2025). Pemerintah Dorong UMKM Naik Kelas, Tingkatkan Kontribusi terhadap Ekspor Indonesia. Https://Ekon.Go.Id.
Kingsnorth, S. (2016). Digital Marketing Strategy: An Integrated Approach to Online Marketing. In Ppm.
Kotler, P., Kartajaya, H., & Setiawan, I. (2021). Marketing 5.0: Technology for Humanity. Wiley. https://books.google.co.id/books?id=ANfzyQEACAAJ
Leso, B. H., Cortimiglia, M. N., & Ghezzi, A. (2023). The contribution of organizational culture, structure, and leadership factors in the digital transformation of SMEs: a mixed-methods approach. Cognition, Technology & Work, 25(1), 151–179. https://doi.org/10.1007/s10111-022-00714-2
Malodia, S., Mishra, M., Fait, M., Papa, A., & Dezi, L. (2023). To digit or to head? Designing digital transformation journey of SMEs among digital self-efficacy and professional leadership. Journal of Business Research, 157, 113547. https://doi.org/https://doi.org/10.1016/j.jbusres.2022.113547
Matarazzo, M., Penco, L., Profumo, G., & Quaglia, R. (2021). Digital transformation and customer value creation in Made in Italy SMEs: A dynamic capabilities perspective. Journal of Business Research, 123, 642–656. https://doi.org/https://doi.org/10.1016/j.jbusres.2020.10.033
Meier, A., Eller, R., & Peters, M. (2025). Creating competitiveness in incumbent small- and medium-sized enterprises: A revised perspective on digital transformation. Journal of Business Research, 186, 115028. https://doi.org/https://doi.org/10.1016/j.jbusres.2024.115028
Munandar, J. M., Cahyadi, E. R., & Andrianto, M. S. (2025). The Impacts of Business Sustainability Factors on Competitiveness and Marketing Performance: An Exploratory Approach to the Case of Indonesian Micro-, Small, and Medium Enterprises. Sustainability (Switzerland), 17(10). https://doi.org/10.3390/su17104593
Noer, M. Y., Chan, A., & Tresna, P. W. (2025). Digital marketing and sustainable innovation in SMEs through bibliometric and systematic review. Cogent Business & Management, 12(1), 1–18. https://doi.org/10.1080/23311975.2025.2548953
Northouse, P. G. (2021). Leadership: Theory and Practice (Vol. 9). SAGE Publications.
Nuvriasari, A. (2024). Competitive Advantage Based on Marketing Innovation and Digital Marketing to Improve MSMEs Business Performance in Yogyakarta, Indonesia. Pakistan Journal of Life and Social Sciences (PJLSS), 22(2). https://doi.org/10.57239/pjlss-2024-22.2.001474
Ongbali, S. O., Omotehinse, S. A., Adams, C. O., Salawu, E. Y., & Afolalu, S. A. (2024). Analysis of the key factors for small and medium-sized enterprises growth using principal component analysis. Heliyon, 10(13), e33573. https://doi.org/https://doi.org/10.1016/j.heliyon.2024.e33573
Putra, R. E., Chandra, A. R., Neswardi, S., Chandra, B., & Nurhayati, N. (2024). Digital Leadership in the Framework of Upper Echelon Theory, Impact on SMEs Competitive Advantage: The Role of Innovative Performance. Asia Pacific Management and Business Application, 13(2), 87–108. https://doi.org/10.21776/ub.apmba.2024.013.02.1
Sawaean, F., & Aburumman, O. (2025). The Impact of Digital Leadership on SMEs’ Innovation Performance: A Mediation-Moderated Model of Digital Capability and Innovation Culture. International Review of Management and Marketing, 15, 1–10. https://doi.org/10.32479/irmm.18270
Sharabati, A. A. A., Ali, A. A. A., Allahham, M. I., Hussein, A. A., Alheet, A. F., & Mohammad, A. S. (2024a). The Impact of Digital Marketing on the Performance of SMEs: An Analytical Study in Light of Modern Digital Transformations. Sustainability (Switzerland), 16(19). https://doi.org/10.3390/su16198667
Sharabati, A. A. A., Ali, A. A. A., Allahham, M. I., Hussein, A. A., Alheet, A. F., & Mohammad, A. S. (2024b). The Impact of Digital Marketing on the Performance of SMEs: An Analytical Study in Light of Modern Digital Transformations. Sustainability (Switzerland), 16(19), 1–25. https://doi.org/10.3390/su16198667
Utomo, H. S., & Susanta, S. (2020). The Effect of Digital Marketing Capability Against Marketing Performance with Innovation as mediation (Study on Batik SMEs during the Covid-19 Pandemic). LPPM UPN “Veteran” Yogyakarta Conference Series Proceeding on Political and Social Science (PSS), 166–173. https://doi.org/10.31098/pss.v1i1.193
Wibowo, M. A., & Maulida, M. (2024). The Role of Digital Leadership, Digital Capability, and Organizational Capability toward Digital Transformation Competencies and Competitive Advantage. Proceedings of the 5th International Conference on Global Innovation and Trends in Economy 2024 (INCOGITE 2024), 801–814. https://doi.org/10.2991/978-94-6463-585-0_55
Wu, C.-W., Botella-Carrubi, D., & Blanco-González-Tejero, C. (2024). The empirical study of digital marketing strategy and performance in small and medium-sized enterprises (SMEs). Technological Forecasting and Social Change, 200, 123142. https://doi.org/https://doi.org/10.1016/j.techfore.2023.123142
Zahara, Z., Ikhsan, Santi, I. N., & Farid. (2023). Entrepreneurial marketing and marketing performance through digital marketing capabilities of SMEs in post-pandemic recovery. Cogent Business and Management, 10(2). https://doi.org/10.1080/23311975.2023.2204592
DOI: https://doi.org/10.24123/mabis.v25i3.1159
Article Metrics
Abstract view : 11 timesPDF - 3 times
Refbacks
- There are currently no refbacks.
Copyright (c) 2026 Muhammad Taufik
This work is licensed under a Creative Commons Attribution 4.0 International License.
This work is licensed under a Creative Commons Attribution 4.0 International License. ISSN: 1412-3789. e-ISSN: 2477-1783.
 |  |  |  |
 |  |  |  |