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This research aims to excavate the impact of the market orientation and innovation capability to value creation in Small and Medium Enterprises (SMEs) of knitting industry located in Bandung, West Java Province. The descriptive and verification methods were used in this research while the data obtained from 281 respondents of entrepreneurs in Binong Jati Knitting Center (Sentra Rajut Binong Jati) in Bandung. The analysis tools used was Structural Equation Modeling (SEM) and the hypothesis was tested using LISREL 8.7 software. The result of this research indicates that both independent variables are having a positive and significant impact on dependent variable partially and simultaneously. This research is expected to have a positive impact as a useful input for entrepreneurs in Sentra Rajut Binong Jati to increase their market orientation and strengthen their innovation capability to embedded superior value in their products. Keywords—Market Orientation, Innovation Capability, Value Creation, Superior Value, SMEs, Knitting Industry, Binong Jati

The Role of Market Orientation and Innovation Capability to Create Superior Value