The Influence of Differentiation Strategy, Market Adaptation, and Digital Capability on Competitive Advantage: The Mediating Role of Business Agility in E-Commerce Firms

Abstract

This study aims to analyze the influence of Differentiation Strategy, Market Adaptation, and Digital Capability on Competitive Advantage, with Business Agility serving as a mediating variable in e-commerce companies in Indonesia. A quantitative approach was employed using a causal research design. Data analysis was conducted through Structural Equation Modeling-Partial Least Squares (SEM-PLS), as it effectively handles complex models and small to medium-sized samples. Data were collected via an online questionnaire distributed to business managers, digital strategists, and decision-makers in e-commerce firms. A total of 110 respondents were analyzed using a purposive sampling technique. The results indicate that both Differentiation Strategy and Digital Capability have a significant effect on Competitive Advantage, both directly and indirectly through Business Agility. Meanwhile, Market Adaptation only has a significant indirect effect through Business Agility. These findings highlight that Business Agility plays a crucial mediating role in strengthening competitive advantage in the digital era.