SMEs include business units that provide the largest contribution in Sidoarjo both in terms of regional income and labor. Competitive strategy needs to be done in order to increase consumer appeal when visiting Tanggulangin to enjoy the unique handicraft products of Tanggulangin Sidoarjo. The purpose of this study are (1) To know competitive strategies undertaken by SMEs in Tanggulangin Sidoarjo (2) Knowing barriers to obstacles in the face of competition. This research uses descriptive qualitative approach. Technique of collecting survey data, interview and documentation and Focus Group Discussion FGD, while Method of analysis using Data Triangulation and Milles Hebermand method (data collection, data reduction, data display and conclusion). The result of this research is the effort developed by SMEs actors in Tanggulangin divided into two namely; (1) Main Business, Exhibition of products and handicrafts typical of Tanggulangin, (2) Supporting supporters, such as place of bird contest, swimming pool, culinary tour, cangkru'an community, live music and watching together. The main obstacle in the tourism market is actually the dispersion of the store that displays the results of SMEs Tanggulangin, lonely consumers if there are no events on Wednesday, Saturday and Sunday.