Abstract

Company, especially small and medium enterprises (SMEs), should seek to maximize the resources holistically and comprehensively concerning to environmental management to improve competitive advantage. SMEs which implement environmental management and green innovation will be able to improve their business productivity, reputation or image and respond to consumer demands on green products which is increasingly high. This study aims to identify and examine the correlation of green management with focus on green core competence, green innovation and green image performance in improving the competitive advantage of SMEs in Semarang. The sample of this study is 79 SMEs in Semarang consisting of textiles industries and products, chemical products, rubber and rubber products, leather and leather products. The sampling technique used is purposive sampling method based on the consideration that the SMEs have been in operation for at least five years and still exists today. The results show that that there is no significant and positive effect of green core competence on the green product innovation performance; there is a significant and positive effect of green core competence on the green process innovation performance; there is a significant and positive effect of green core competence on the green image; there is no significant and positive effect of green product innovation performance on the green image; there is no significant and positive effect of green process innovation performance on the green image; there is a significant and positive effect of the green image on the Competitive advantage. SMEs’ competitive advantage in Semarang can be improved by increasing green core competence and green process innovation performance through the Green image.

Keywords: green core competence, green innovation performance, green image, green product innovation performance, green process innovation performance