Thc goal olthis rcscarch is to dcvclop cconorrrics, cspccially in stratcgetical managcnrcnt scicncc aiming thc dcvelopmcnt of fit ffodcl lor high dcgrcc compctilivcncss in Micro and Middlc Enleryrisc SMES (Usaha Mikro Kccil dan Mcncngah and abbrcviatcd as UMKM in hahasal in Batik (lndoncsian troditional hand-nradc clothing dcsign by applying wax (nralam ii hahasal). Thc practical aim of this rescarch is to apply this modcl scning as an altcmativc input foi Batik Micro Enterpisc in ordcr to dcvelop thcir high dcgrcc cornpctivcncss. Thc result ofthis study is tcnded to give input for Indoncsian govcrnftcnl in lcrms oI mainlenunce policy cl-fcctiveness and in up scaling Batik Micro Entcrprisc. This study analyzcd thc govcrnmcntal rolc, rcsourccs and cntrcprcncurship in uffccting thc lcadcrship cost and ditlerential strategy in buildirg the high degree courpetitiveness of Batik Miffo Ente.prise by applying thc dcscriptive analysis and Srucrural Equation Modclling (SEM1. The data wcrc processed with AMOS soliware. Thc Rcspondcnts wcrc takcn t'rom batik's srnall cnterprisc in jogia and solo as lnany as 144 cntctprisc, rcgistctcd in tltc Dopartmcnt ofCoopcrativcs aod SMI-s jogia and solo. Thc rcscarchcr Ibuld that most ol stratcgy botik's snrall cntcrprisc arc diffcrcntiation stratcgies. Govcrnmcnt and rcsourccs variable have a positive inlluence and signilicart to competitive advaEtage by batik Micro Enteprise.