Record Detail

Rural banks (RBs) have a big role to boost the regional economy, but its contribution to GDP is relatively small. In terms of return on assets and return on equity, RBs in Jakarta and Banten are relatively no superior compared to other provinces in Java, while Banten and the other provinces are relatively close to the center of the national economy. This shows that the performance of the RB in these two provinces has not been able to be said superior. It seems allegedly related to the problems in competitive strategy and value creation. This study aims to investigate the effect of value creation and competitive strategy on the performance. By using 100 RBs in the two provinces, there are 50 eligible questionnaires and analyzed by using PLS, the result shows that value creation has a higher influence than competitive strategy in influencing the performance. This finding is expected to be an alternative model of solution for RB management in Jakarta and Banten that the value creation helps a greater effect on the improvement of the performance than a competitive advantage. For practical implication, it is suggested that customer benefits, business domain, and business partner should be well managed. Originality the RBs run the business more based on experiences perspective. It is good but not enough without the value creation. It seems that in the future the RBs are not only as trust institutions but also as institutions with the full touch of technology and value creation.