The Relationship Between Core Competencies And Product Innovation In Micro, Small And Medium Enterprises

Abstract

This study aims to analyze the relationship between core competencies and product innovation in
Micro, Small, and Medium Enterprises (MSMEs). Core competencies refer to the unique capabilities
and resources possessed by the organization, which provide a competitive advantage and enable the
creation of value for customers. Meanwhile, product innovation is defined as the process of developing
new ideas into relevant and superior products or services. This review is carried out through the
literature review method by collecting and evaluating relevant research. The results of the study show
that core competencies, such as knowledge, skills, and organizational culture, are an important basis
in the development of product innovation. Strong core competencies can increase the competitiveness
of MSMEs through superior product innovation, opening up new market opportunities, and increasing
customer satisfaction and loyalty. In addition, product innovation driven by core competencies also
plays an important role in maintaining business sustainability, especially in the midst of increasingly
fierce market competition. Thus, MSMEs need to continue to improve their core competencies to
create product innovations that not only meet customer needs but also provide significant added
value.