DETERMINANTS OF QUALITY BASED DIFFERENTIATION: GOVERNMENT POLICY AS MODERATING

Abstract The research focus is analyzing, and describing strategic efforts and steps to implement dynamic capability management as an intangible resource to improve company performance through competitiveness variables; take advantage of pro-innovation and quality-based differentiation opportunities as mediation, and moderated by government policies that can accelerate the influence of dynamic capabilities on company performance. To answer the objectives and focus of this research, testing with direct and indirect relationships between variables uses a quantitative approach with the structural equation method. The research sample used proportion stratified, random sampling obtained the validity of the respondents as many as 168 people as representatives of 168 palm oil companies in Indonesia, while the population of this study was 289 companies. Thirteen path coefficients are positive, and path analysis of moderation has a significant but negative effect. So it can be concluded that Dynamic Capability, Pro Innovation Exploitability, Competitive Advantage and Quality Based Differentiation play an important role in improving company performance. However, government policies can slow down the performance of the palm oil industry. Therefore, it is important for business players in the palm oil industry in Indonesia to be able to better know the direction of national policies so that in the future they will not be wrong in determining the company's business strategy and remain in line with government policies