Leveraging Dynamic Capabilities for International Expansion: A Case Study of A Leather Craft MSME

Lina Budiarti; Sudarmiatin; Heri Pratikto

doi:10.63922/ijebir.v5i03.3063

Lina Budiarti Universitas Negeri Malang, Indonesia
Sudarmiatin Universitas Negeri Malang, Indonesia
Heri Pratikto Universitas Negeri Malang, Indonesia

DOI: https://doi.org/10.63922/ijebir.v5i03.3063

Keywords: Dynamic Capabilities, MSME, International Market

Abstract

Amidst market uncertainty, MSMEs face significant challenges in maintaining business continuity. This study aims to analyze the implementation of the dynamic capabilities framework as an instrument for MSMEs to achieve sustainable competitive advantage. One of the MSMEs that applies the dynamic capabilities framework is Shoeka. The purpose of this study is to describe the implementation of the dynamic capabilities framework at Shoeka as an effort to respond to rapid and competitive business environment changes, and describe the implementation of the dynamic capabilities framework at Shoeka to enter the international market. Using a descriptive qualitative approach, this study explains how the three main pillars in the dynamic capabilities framework, namely sensing, seizing, and transforming, are operationalized in the MSME. Data were analyzed using the interactive model developed by Miles and Huberman. This study uncovers that MSMEs within the fashion products sector must develop robust sensing, seizing, and transforming capabilities to navigate the volatility of consumer preferences. In the context of internationalization, a systematic analysis of global market trends is essential and this enables firms to capture emerging opportunities by strategically reconfiguring organizational resources to align with international demand.

References

Agus, Heriyono, & Eliyawati. (2025). Market Orientation and Dynamic Capability as A Basis Competitive Advantage Achievement of MSMEs. International Conference on Accounting, Management, Entrepreneurship and Business (ICAMEB), (pp. 41-49).
Arraya, M. (2025). Distinctive Capabilities System in MSME’s Business Model Adaptation: Evidence of the Moderating and Mediating Effect of Adaptive Capability. Central European Management Journal, 33(2), 183-198.
Bleady, A., Ali, A. H., & Ibrahim, S. B. (2018). Dynamic Capabilities Theory: Pinning Down a Shifting Concept. Academy of Accounting and Financial Studies Journal, 22(2), 1-16.
Cateora, P. R., Gilly, M. C., Graham, J. L., & Money, R. B. (2016). International Marketing. New York: McGraw-Hill Education.
Efrina, L., Azmi, M., Primadiva, P. P., Utama, A. N., & Anggun, D. (2024). Application of RBV Theory in Measuring the Success of MSME Competitive Advantage Business Strategies in the Era of Uncertainty. Electronic Journal of Education, Social Economics and Technology, 5(2), 495-510.
Eisenhardt, K. M., & Martin, J. A. (2000). Dynamic Capabilities: What Are They? Strategic Management Journal, 21, 1105-1121.
Fitriati, T. K., Purwana, D., & Buchdadi, A. D. (2020). Dynamic Capabilities and SMES Performance: The Mediating Effect of Innovation (Study of SMES in Indonesia). Advances in Health Sciences Research, volume 27 (pp. 457-464). Dordrecht: Atlantis Press.
Government Regulation Number 7 of 2021. (n.d.). Ease, Protection, and Empowerment of Cooperatives and MSMEs. Jakarta, DKI Jakarta, Indonesia.
Kominfo, K. M. (2025). Satu Data. Retrieved from https://satudata.malangkota.go.id/: https://satudata.malangkota.go.id/v2/publik/data/sektoral/filter/25?periode=Bulan
Kotler, P., & Armstrong, G. (2018). Principles of Marketing. London: Pearson Education Limited.
Mariani, A. S., Rakhman, A., Widjojokusumo, E., Soetanto, G., & Leonardi, J. (2024). Exploring the Dynamic Capabilities Pattern in Small and Medium-sized Enterprises (MSMEs): A Phenomenological Study of MSME stagnancy in Indonesia. Syntax Admiration, 5(7), 2431-2446.
Miles, M. B., & Huberman, A. M. (1994). Qualitative Data Analysis. California: Sage Publications.
Mishra, R., & Kiran, K. B. (2025). Unveiling the Dynamic Capabilities’ Influence on Sustainable Performance in MSMEs: A Systematic Literature Review Utilizing ADO-TCM Analysis. Asia-Pacific Journal of Business Administration, 17(2), 561-592.
Onkvisit, S., & Shaw, J. J. (2007). International Marketing Analysis and Strategy Fourth Edition. London: Taylor & Francis e-Library.
Riyanto, M. A., & Alfiansyah, A. (2025). MSME Development Based on Dynamic Capability Analysis and Upgrading Global Value Chain. Dinasti International Journal of Digital Business Management, 7(1), 121-130.
Sholehuddin, S., & Sudarmiatin. (2024). Implementation of Green Marketing in SMEs as an Effort to Enter the International Market (Case Study of Creabrush Indonesia). International Journal of Economics, Business and Innovation Research, 3(6), 467-477.
Shu, C., & Srimuang, K. (2026). A Dynamic Capability Perspective on Digital Transformation: Drivers, The Process and Consequences. Management Decision, 64(3), 746-778.
Simanjuntak, R. H., & Pasaribu, M. (2023). The Influence of Entrepreneurial Leadership, Dynamic Capability, Innovation, and Digitalization on The Performance of MSME. Al Qalam: Jurnal Ilmiah Keagamaan dan Kemasyarakatan, 17(4), 2849-2868.
Susiang, M. I. (2024). Dynamic Capabilities, Resources, and Social Capital in Creating Sustainable Competitive Strategies in Indonesian MSME. International Journal of Business, Law, and Education, 5(1), 1033-1045.
Tarihoran, A. D., Hubeis, M., Jahroh, S., & Zulbainarni, N. (2023). Market-Based Dynamic Capabilities for Msmes: Evidence from Indonesia’s Ornamental Fish Industry. Journal of Open Innovation: Technology, Market, and Complexity, 9, 1-13.
Teece, D. J. (2007). Explicating Dynamic Capabilities: The Nature and Microfoundations of (Sustainable) Enterprise Performance. Strategic Management Journal, 28, 1319-1350.
Teece, D. J., Pisano, G., & Shuen, A. (1997). Dynamic Capabilities and Strategic Management. Strategic Management Journal, 18(7), 509-533.
Thamrin, R. M., Rahmawati, R., Juniar, A., & Nuryadin, M. R. (2025). The Influence of Dynamic Capability Competence and Innovation Performance on the Sustainable Competitive Advantage of MSMEs in Papua. Jurnal Ilmiah Manajemen Kesatuan, 13(2), 1039-1050.
Zhou, S. S., Zhou, A. J., Feng, J., & Jiang, S. (2017). Dynamic Capabilities and Organizational Performance: The Mediating Role of Innovation. Journal of Management & Organization, 1-17.