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Background:COVID-19 has significantly affected the socio-economy globally. Aprisindo director claimed that the socio-economy effects due to the COVID-19 pandemic are also encountered by the shoe company. Shoe company mapping revealed that 60% of companies experienced suffer demand, while the remaining 40% experienced moderate and high demand. The current research was done on a shoe company in Tangerang, which has many layoffs for about ± 700 workers in April 2020. It occurred due to the COVID-19 pandemic, which has decreased goods order. This research aimed to know the effect of the COVID-19 pandemic on a shoe company in Tangerang by using SEM-PLS and identifying the strategic improvement suggestion in overcoming the COVID-19 pandemic on shoe company in Tangerang by using NGT (Nominal Group Technique) method.
Methods:This research employed saturation sampling (census), where all population members were chosen as the sample. The primary data of the current research were collected by using an online questionnaire fulfilled by 33 staff of CSA (cutting-sewing-assembling) production leader. The hypothesis was tested using partial least square analysis (PLS) by using SmartPLS 3.0 software. In contrast,to find the prioritized issues improvement solution, the NGT (Nominal Group Technique) method was used. NGT participants further employed six internal sources and one facilitator.
Result:COVID-19 pandemic positively and directly affected the innovation (H1), COVID-19 pandemic positively and directly affected operational performance (H2), operational performance positively and directly affected company profitability (H4). In contrast, innovation did not affect profitability (H3), and the COVID-19 pandemic did not directly affect profitability (H5). Innovation improvement strategy obtained five improvement solutions, the operational performance obtained five improvement solutions, while profitability obtained nine improvement solutions.
Conclusions:The increase of COVID-19 cases can improve innovation and operational performance, and an improvement in operating performance could lead to increased profitability in shoe companies. Researchers thought that there would be other factors that affect profitability, such as financial performance. Through this research, companies can find out what strategies need improvement in innovation, operational performance, and profitability to survive and be competitive during this pandemic.