The Influence of Digital Transformation and Business Model Innovation on the Operational Performance of Msmes: A Case Study of a Coffee Shop in Yogyakarta

This study aims to analyze the influence of digital transformation and business model innovation on the operational performance of MSMEs, specifically in the coffee shop sector in Yogyakarta. The research is motivated by the increasing competition among coffee shop in the region, which demands business owners to continuously innovate and adapt to technological advancements. The study employed a quantitative method using a survey approach, collecting data from 112 coffee shop entrepreneurs through questionnaires. Data analysis was conducted using Structural Equation Modeling with the Partial Least Squares (SEM-PLS) technique. The results indicate that digital transformation has a positive and significant effect on operational performance, although its influence is not as strong as that of business model innovation. Business model innovation shows a highly significant impact on operational performance. Moreover, digital transformation also indirectly influences operational performance through business model innovation.