Analysis of the Application of Dynamic Capabilities Adaptation Phases in Innovation Development (Study on Save and Loan Cooperative Smes in Badung Regency)

SMEs in Indonesia currently make the largest contribution to gross domestic product. Therefore, the performance of MSMEs engaged in the financial sector, especially cooperatives, must always be improved. Improved performance is closely related to the company's business strategy. Strategy is a company's unique way to gain competitive advantage, company performance is a representation of competitive advantage. Strategy formulation and strategy implementation by taking into account technical and non-technical aspects is a way to achieve optimal performance transformation. One of them is the adaptation phases of the dynamic capability approach in the development of innovations in the MSME sector of the Cooperatives. This research was conducted with a qualitative case study approach with the object of research being a savings and loan cooperative located in Badung Regency-Bali. The research was conducted by interview and direct observation to the cooperative. The research method used is a single-case holistic. Data analysis was carried out by means of within-case analysis. The results show that the phases of dynamic capability adaptation play an important role in the innovation development process in Savings and Loans Cooperative SMEs. This study provides implications for the cooperative sector SMEs regarding the steps taken by cooperatives to absorb external knowledge so as to assist in determining the innovation development process. Based on these findings, This research has contributed to the development of the concept of dynamic capability adaptation phases from the results of interviews during the research conducted by the researcher. This study is expected to contribute input in the development of innovation for SMEs in the cooperative sector.