Enhancing MSME Performance Through Customer Centered Design and Competitive Intelligence

Abstract

This study examines the impact of customer centered design and competitive strategy on the business performance of Micro, Small, and Medium enterprises (MSMEs) in the technology and manufacturing sectors, with a focus on Bekasi Regency, Indonesia. Through a mixed methods approach, the research integrates strategic absorptive capacity and competitive intelligence as mediators to explore how these factors influence business performance. The results indicate that customer experience management significantly enhances strategic absorptive capacity, which, in turn, positively impacts competitive intelligence and business performance. However, product development capability was found to have no direct effect on strategic absorptive capacity. The findings highlight the importance of developing strategic absorptive capacity to effectively utilize customer insights and market trends, thereby improving business competitiveness. The study provides valuable insights for MSMEs owners and managers, especially in rapidly developing regions, offering practical recommendations for building capabilities that foster sustainable growth and market adaptability. These findings contribute to the theoretical understanding of innovation management and competitive strategy in MSMEs.