摘要：Nowadays, Small and medium enterprises (SMEs) play essential role for the development of the
economy. Thus, any improvement on the performance of such organizations may contribute significantly
on overall economy. The purpose of this paper is to analyze the effect of business sphere on
competitive advantage and business performance. In addition we study the effects of the competitive
advantage on business performance of SMEs through a quantitative approach and by considering
50 businessman SMEs built by Surabaya Trade Service Department. Data collection in this
study was prepared by distributing questionnaires. Data analysis technique used in this research is
SEM analysis with PLS. The results indicate that: (1) business sphere influences on business performance
of SMEs under the Surabaya Trade Service Department; (2) business sphere has substantial
influence on competitive advantage of SMEs in the Surabaya Trade Service Department; (3)
competitive advantage sphere has substantial influence to business performance of SMEs built by
Surabaya Trade Service Department.
关键词：SMEs empowerment Business setting;
Competitive advantage;
Business performance;
Local economic development
