Examining the Impact of Innovation Capabilities and Transformational Leadership on Competitive Advantage: A Case Study

In light of the significance of the oil and gas industry in Indonesia's economic landscape, this study explores the competitive advantage of XYZ company, a private contractor in this sector, with a focus on the influence of innovation capabilities and transformational leadership. The oil and gas industry's transition from foreign management to state-owned enterprises (BUMN) has presented challenges for private contractors, necessitating a deeper understanding of factors contributing to competitive advantage. The research findings reveal that both innovation capabilities and transformational leadership independently exert a positive and significant impact on competitive advantage. Elevating innovation capabilities enhances
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company's competitiveness by fostering product and process innovation, while bolstering transformational leadership contributes to improved employee performance and motivation. Crucially, when innovation capabilities and transformational leadership are considered together, they jointly exert a positive and significant impact on competitive advantage. This underscores the importance of XYZ company's prioritizing the development of both aspects to maintain and enhance its competitive position in the industry. Recommendations for the company include persistently enhancing innovation efforts, improving leadership clarity through comprehensive job descriptions, and strengthening product or service offerings. Future research should consider additional independent variables and extend the study to different industries for a comprehensive understanding of competitive advantage determinants.