Competitive strategy based on transformation and dynamic capabilities in resulting business performance of Islamic microfinance institutions

摘要

Since there are 100 million people with an income less than USD2.00 per day, poverty is considered as a major problem in Indonesia. Microfinance as an important solution in poverty alleviation program, could not yet meet the needs of 500 million poor people in need of small business credit to improve their business performance. Islamic microfinance institutions ("MFIs"), especially Baitul Mall wat Tamwil ("BMT"), is considered as major instrument in regulating overall social system includes the existence of human and high values. Although the number of BMT is lower than other Islamic MFIs, but it has higher number of beneficiaries, thus able to serve and fulfill the need of microfinance's business. Along with the increasing role of BMT within microfinance business, it is necessary to execute a dynamic transformation associated with a variety of other factors to improve its business performance. There is not yet any study that explores and evaluates the relationship among transformation, dynamic capability, competitive advantage and performance constructs in Islamic MFIs. Studies on the effect of transformation and dynamic capability approach in improving the BMT's performance, either through competitive advantage or not, will become a positive contribution either for BMT or Islamic MFIs to overcome dynamic changes faced in implementing their mission to alleviate poverty. The result of hypothetical descriptive test are (a) transformation and dynamic capability approach are able to respond as opportunities to improve the company's quality of management and profit; and (b) the company is able to increase its competitive advantage and business performance. To strengthen the descriptive test results, a statistical test by using Partial Least Square method is required on the hypotheses.