Blue Ocean Strategy and Open Innovation as Drivers Of Business Performance in the Digital Dystopia Era: An Empirical Study In North Sulawesi

The massive digital dystopia era triggers extreme hypercompetition in conventional markets, forcing organizations to reconceptualize their business models for corporate survival. This study aims to examine and analyze the influence of Blue Ocean Strategy (BOS) and Open Innovation (OI) on Business Performance (BP) within the creative industry and digital technology sectors in North Sulawesi, Indonesia. Grounded in the Resource-Based View (RBV) and Dynamic Capabilities theoretical frameworks, this study positions open innovation as a mediating variable. An explanatory quantitative approach was implemented, targeting a population of middle managers and top executives. A purposive sampling technique was utilized to gather 150 valid respondents. Data analysis was executed using Structural Equation Modeling Partial Least Squares (SEM-PLS) utilizing SmartPLS 4.0 software. The evaluation of the measurement model (outer model) demonstrates that all construct indicators possess exceptional convergent validity, discriminant validity, and internal reliability (Composite Reliability > 0.85; AVE > 0.50). The structural model analysis (inner model) empirically proves that Blue Ocean Strategy has a direct, positive, and significant effect on Business Performance. Furthermore, Open Innovation is empirically verified to act as a significant complementary partial mediator that strengthens this causal relationship. Strategic recommendations are directed toward the eradication of the Not-Invented-Here syndrome and the establishment of local micro-alliances to accelerate external knowledge absorption in generating competition-free market spaces.