DEVELOPMENT OF PRODUCT POTENTIAL FOR COMMUNITY ENTERPRISES TO ENHANCE COMPETITIVENESS AND GENERATE ECONOMIC IMPACT

Abstract

This study aims to develop the product potential of community enterprises to enhance their competitiveness and generate sustainable economic impact. It employs a mixed-methods approach, integrating both qualitative and quantitative methodologies across three core objectives: (1) to examine internal organizational environments, development needs, and participatory factors related to product potential and (2) to construct a strategic framework for product development. The research involved four target groups: community leaders, enterprise chairpersons and members, participants of training and development initiatives (n = 30), and subject-matter experts (n = 30), with a total sample size exceeding 200 individuals. Instruments included semi-structured interviews, causal relationship path analysis, satisfaction and prototype evaluation questionnaires, all of which demonstrated acceptable content validity (IOC 0.88 – 0.92) and internal consistency (Cronbach’s Alpha 0.87 – 0.90). Findings reveal that while community enterprises exhibit strong adaptability and foundational awareness of product development, limitations persist in innovation adoption, value creation strategies, and access to broader markets. Quantitative results from structural equation modeling (SEM) confirm that product innovation is the strongest predictor of value addition (β = 0.87) and product development (β = 0.76), underscoring innovation as a key driver of competitiveness. The proposed development framework integrates product design, sustainable production practices, digital technology adoption, and open innovation principles. Pilot implementation of the model through the development of a localized cosmetic product — mushroom-based facial cream — demonstrated high consumer satisfaction, with evaluation scores averaging above 4.5 out of 5 across all key metrics including effectiveness, usability, and market readiness. The study concludes that systematic product development, anchored in innovation and contextual adaptability, is essential for transforming community enterprises into competitive and economically impactful ventures. The model developed herein serves as a transferable framework that can be customized for similar community-based enterprises seeking market expansion and sustainable growth.