Relationship Between Knowledge Management with Cost Leadership and Differentiation Strategies in Sumbawa Weaving SMEs: The Moderating Role of Organizational Design

Small and Medium Enterprises (SMEs) are the main drivers of the economy in developing countries, one of which is Indonesia. Several SMEs still need to be developed in Indonesia, especially for the 3T region (lagging, leading, and outermost). Sumbawa is one of these areas. The majority of SMEs in the Sumbawa area are weaving SMEs. Weaving SMEs in this region still have problems in terms of SME competitiveness, innovation, and SME creativity. Therefore, they have not been able to compete with SMEs outside the 3T area. Thus, the importance of competitive strategy and knowledge management can encourage the management of information into knowledge that can be used for strategic decision-making, especially the competitive strategy of SMEs. This study will examine the application of knowledge management to SMEs in Sumbawa and whether the applied knowledge management can encourage the creation of a competitive strategy for Sumbawa SMEs. The research was conducted by census/saturated sampling to produce accurate results. The results show that the application of knowledge management in Sumbawa SMEs is proven to influence SMEs' competitive strategy. The study also contributes to new research on the role of organizational design that can affect knowledge management's influence on competitive strategy