Enhancing business performance of micro, small, and medium enterprises (MSMEs): The role of market orientation, entrepreneurial orientation, knowledge management, competitive advantage, and social media

MSMEs play a vital role in Indonesia’s economic development, particularly in the food and beverage sector in Kediri City, which accounts for more than half of the region’s active MSMEs. Despite their strategic importance, MSMEs continue to face various challenges related to limited resources, digital adoption, and market competitiveness. This study examines the influence of market orientation, entrepreneurial orientation, and knowledge management on MSME business performance, with competitive advantage as a mediating variable and social media use as a moderating variable. A quantitative approach using Partial Least Squares–Structural Equation Modeling (PLS-SEM) was employed to analyze survey data from 385 MSME owners and managers in Kediri. The findings indicate that market orientation, entrepreneurial orientation, and knowledge management significantly enhance competitive advantage and business performance. Although competitive advantage does not directly influence business performance, it functions as a partial mediator linking strategic orientations to improved outcomes. Additionally, social media significantly strengthens the effects of the three strategic orientations on business performance, underscoring the importance of digitalization in shaping MSME competitiveness. The results of this study highlight that strategic orientations combined with effective digital engagement contribute to MSME resilience and performance in dynamic business environments. This study provides theoretical contributions by integrating strategic orientation and digitalization perspectives, and practical implications by emphasizing the need for enhanced digital literacy, innovation capacity, and knowledge-based strategies to help MSMEs sustain competitiveness in both local and global markets.