The purpose of this study is to build an empirical research model and prove the influence of market orientation on product innovation and competitive advantage. The study also proves the intervening role of product innovation and competitive advantage on increasing market performance. In addition, market uncertainty is also tested in moderation in strengthening the relationship between product innovation and competitive advantage in market performance. The study tests 178 samples of Batik SME players in Surakarta. A purposive sampling was used as this research’s sampling method. The result of this study proves empirically that market orientation positively, significantly influences product innovation and competitive advantage. The test of mediation role between product innovation and competitive advantage in market performance also shows positive and significant results. The result of the test on moderation role between Market uncertainty in the relationship between product innovation and competitive advantage on market performance also shows positive and significant influence on market performance.

This research was conducted to examine the extent to which market uncertainty can encourage market players, especially SMEs, to exploit innovation and environmentally friendly orientation to improve their performance. From a supply chain perspective, market uncertainty, which in this study is proxied by the Covid-19 pandemic, has great potential to reduce performance and disrupt production and distribution lines as well as consumer demand. This encourages affected SMEs, such as SMEs that focus on providing tourism products, such as fashion and merchandise, to maintain their performance with product innovation, and minimize the use of non-environmentally friendly products. The object of research is Small and Medium Enterprise (SME) producing tourism souvenirs in Yogyakarta, Indonesia. Using the analysis technique of Structural Equation Modeling (SEM) with 150 respondents, the findings indicate that market uncertainty serves as a catalyst for SMEs to maintain performance through marketing innovation and product reorientation. Specifically, the results show that there is a positive and significant influence between innovation and green orientation on SME performance, and the mediating effect of market uncertainty to increase marketing innovation and environmentally friendly orientation. These findings theoretically contribute to explaining the relationship between supply chain management in the context of market uncertainty. In practical terms, this study confirms the need for support by stakeholders to support limited domestic tourism, according to health protocols, as well as digitalization of marketing for tourism SMEs.

The SMEs is currently experiencing many challenges, especially performance improvements. To improve performance, companies are required to increase the effective organizational learning so that it is emphasized on improving human resource development in addition to being able to overcome market uncertainty. This study examined empirically the variables of human resource development and market uncertainty by using the moderating variable of effective organizational learning to increase corporate performance. Using data from 100 SMEs in two regencies in Central Java, and carrying out using AMOS 22, the results prove that effective organizational learning moderates human resource development and market uncertainty in their activities. These results prove that human resource development is needed to improve the effective organizational learning. This study provides the best insight into human resource development, especially in the SMEs. Some of the observed causes have been discussed in this study.