PORTER'S DIAMOND THEORY IN COMPETITIVENESS ENHANCEMENT STRATEGIESMICRO, SMALL, AND MEDIUM ENTERPRISE (MSME) PRODUCTS IN JAYAPURA CITY

Abstract

Article 33 paragraph (4) of the 1945 Constitution explains that "...the National Economy is organized based on economic democracy with the principles of togetherness, fair efficiency, sustainability, environmental awareness, independence, and by maintaining a balance between progress and national economic unity." MSMEs are part of the National economy that is based on independence and has great potential to improve the welfare of society. Micro, Small and Medium Enterprises (MSMEs) play a role as the driving force of the economy in Jayapura City and contribute to Jayapura City; however, the results have not yet been felt or have an impact on the residents of Jayapura City. Based on data from the Ministry of Cooperatives and SMEs, MSMEs currently account for 99 percent of all business units, with their contribution to GDP reaching 60.5% and to employment absorption reaching 96.9% of the total national workforce absorption. MSMEs are proven to be able to contribute to the national economy. Developing MSMEs must be accompanied by adequate competitive capabilities for the products they produce, a requirement for business actors to survive. MSME entrepreneurs in Jayapura City obtain local raw materials from Jayapura City, and some obtain them from outside. For capital, many MSME entrepreneurs rely on personal capital, many do not understand banking issues or obtain funds from formal sources from banks, lack knowledge of production technology and quality control, lack knowledge about marketing, and have limited human resources. Therefore, it is necessary to determine a strategy to increase competitiveness, namely what the company is currently doing, how the environmental conditions (industry analysis, competitors, socio-political and relative strengths and weaknesses), and what MSMEs in Jayapura City. are y as10 respondents used the Analytical Hierarchy Process (AHP) tool to analyze the level of importance of each dimension in the Porter Diamond Model by taking experts from bureaucracy, entrepreneurs, and universities. The results of the analysis of the six dimensions of the Porter Diamond that have a strong influence on the strategy to increase the competitiveness of MSME products are the dimensions of Increasing the Role of Government; the strategy that must be carried out is optimizing the government in providing technical assistance, capital assistance, and quality control.