Strategy for Increasing MSME Halal Certification, Identifying Characteristics of MSME Actors Using the K-Means Approach

Abstract

The rapidly growing and popular business trend in Indonesian society is the micro, small, and medium-sized enterprises (MSMEs), which have had a significant impact on national GDP growth in recent years. The managers of these MSMEs face a variety of challenges, particularly in providing services or products that guarantee customer satisfaction. In recent years, there has been a strong association with the halal industry, which aims to ensure that all goods or food providers deliver high-quality products while adhering to halal standards in terms of ingredients and processes used. MSME operators are required to register their products or services for halal certification, which positively impacts customer perceptions. Specifically, in the Special Region of Yogyakarta, various types of MSMEs have developed, but many still lack halal certification. This study aims to understand the operational standards implemented by MSME business owners based on their participation in halal certification. The K-Means clustering method is used to illustrate the readiness and availability of halal certification in MSMEs, which could boost the halal industry in Yogyakarta. This clustering process utilizes various supporting variables identified during the research methodology phase, particularly concerning the halal certification status of these MSMEs. Based on the results of the K-Means clustering analysis, three clusters were formed, each containing several MSMEs with similar characteristics as determined by the average values of each variable. Additionally, two clusters were identified as having the potential to receive recommendations, and these recommendations were made by considering the conditions and capabilities of the MSMEs within those clusters. The primary focus is to promote and encourage the adoption of halal certification in MSMEs. This could greatly benefit businesses by enabling effective marketing strategies, increasing sales, and maintaining business continuity.