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The purpose of this paper is to identify dimensions and indicators of “Catur Paramitha” that improve the performance of SMEs in Sarbagita area.

The study used a quantitative and qualitative approach. Glaser and Strauss’s (1967) grounded theory, and Strauss and Corbin (1990) were the bases for the qualitative approach. It also employed a quantitative approach to analyze the difference between the SMEs. The setting comprised of three municipalities in Bali and Denpasar; altogether, these areas are known as “Sarbagita.” Bali is divided into 8 districts, 1 city, and 57 regions. Due to the large number of SMEs in Bali, there is no institution that has been able to identify the exact number of SMEs in “Sarbagita.”

There is a significant and positive relationship between “Catur Paramitha” and the performance of SMEs in both East Java and Bali. The finding also describes the performance of the SMEs that apply the principles of “Catur Paramitha” and those that do not. “Catur Paramitha” that consists of “metria,” “karuna,” “upeksa” and “mudita” is a pivotal concept to apply for SME owners/management in order to prevent money from being the only basis for capitalist competition. Local wisdom can control cannibalism, turning it into humanism and friendship-based partnership or cooperation.

The originality of this research is its methodology, and the fact that the local culture becomes the basis for a successful business venture and organizational performance as the key for a successful business venture. Improved organizational performance is the result of more developed internal resources and competitive advantage. Local culture is a very important element to develop a competitive advantage (Barney and Clark, 2007). Local culture is local wisdom. Studies focusing on the local wisdom theory (Clayton and Birren, 1980; Robinson, 1990; Sternberg, 2000) use qualitative methods. Quantitative method is the approach used to explain the relationship between humanistic values and the performance of the SMEs (competitive advantage) based on statistical analysis. Therefore, the originality of this study is a mixed approach between quantitative and qualitative with interpretive-based approaches.

The purpose of this paper is to find out: strengths/weaknesses, environmental opportunities/threats encountered by traditional market; traditional market business position; and a proper business strategy to be applied by traditional market and its implication on the marketing strategy.

The population in this research was policy makers in Bali Province, in relation to the development and revitalization planning of traditional market, and traders doing their activity in a traditional market. The data analysis used internal and external strategic factor matrix (IE).

Key external strategic variables that pose both current and future threats are information technology, bargaining power with buyers and competitors. The key internal strategic variables which are included both present and future strengths are product quality, product variety offered, uniqueness of products offered, affordable product prices, bargaining process, strategic market location, service speed and vast parking lot. Based on the business position of the present Denpasar traditional market which is in quadrant V, while in the future it will be in quadrant II, the strategy properly applied is the proper competition strategy to be grown and built.

The research was only conducted to traditional markets in Bali, thus it cannot be generalized to wider areas, and this research used the survey method where the data collection process was done in a certain point of time or cross-section, whilst the environment would experience extra quick changes. Therefore, it is important to do this research in the future.

The originality for this paper shows the comprehensively development strategies, revitalization strategies in traditional market, by using strength weakness opportunity threat and IE matrix analysis, and research location which is conducted in Bali that has different tourist condition and potentials from other regions.