LAUSR

The high market potential of shipyard industry provides a great opportunity for the growth of the industry in Indonesia. Besides the domestic market, the international market also provides opportunities for the shipbuilding company in Indonesia to take part at several international markets. However, the international market share of Indonesian shipbuilding industry tends not to be high, which indicates that the performance of this sector is still low. This is due to problems related with functional strategies and unique capabilities in the industry. Thus, the study aims to investigate the effect of unique capabilities and functional strategy on company performance in the Indonesian shipbuilding industry through causality investigation on 50 shipbuilding companies. Data is tested through PLS models. The findings show that simultaneously and partially unique capabilities and functional strategy affect on company performance. Functional strategy provides more dominant effect than unique capabilities in influencing the company performance.