Abstract. Study relates to the correlation between diversification strategy and corporate sustainability performance, many of them are conducted in service industry. In this study, it is explained about competitive advantage that also becomes the important attention on the creation of corporate sustainability performance. But study relates to mediating effect of competitive advantage on the correlation of diversification and corporate sustainability performance, has not reviewed especially in-service industry and it becomes the focus of this study. The study is conducted by case study on Building Automation System industry in Indonesia as one of service industries that needs corporate sustainability performance. There are 43 directors of business unit which is taken their data by questionnaire as respondent, with using Structural Equation Model analysis. This finding is stated that corporate sustainability performance can be achieved well through the implementation of diversification strategy. But, competitive advantage is unable mediating diversification strategy on the improvement of corporate sustainability performance. This finding is useful to support Indonesia government's program in facing issue of "Saving Energy", through the review of Building Automation System industry.
IntroductionEvery company both product and service, is truly operating with the final objective to get the optimum of company performance [1]. Those cases become a task for Chief Executive Officer (CEO) to ensure shareholders. However, for company that is still in developing phase, corporate sustainability performance becomes a must [2]. To get corporate sustainability performance, company uses some strategies. Thus the implementation of that strategy is not often misdirected [3]. As the result, the expected performance is not achieved well. So, it is needed clarity of goals of business performance that want to be achieved, those goals are implemented on company strategy. The creation of company strategy is depend on resource, it can deliver to company to get competitive advantage [4]. Competitive advantage is one of source to corporate sustainability performance from company [5]. One of strategies that often used its relation to competitive advantage are diversification strategy [6]. Diversification strategy focuses on two cases which are company and product, every changing that is conducted to innovation and the creation of superior strategy is always needed diversification [7]. The strategy conducted on product through diversification, is one of attractive strategies to new and old consumer, and it is also useful to improve company competitive advantage [8]. Speed in adjusting competitive advantage is appropriate with market trending, it becomes a pillar from the creation of diversification strategy [9].
