Abstract: The main objective of the research is to exploring the SMEs competitiveness in Madura Island. Furthermore, we will try to formulate and analyze alternative strategy which can be decided by SMEs based on internal and external environment. We used SWOT analysis technique to reaches the objectives. This research used verificative approach and descriptive method. The data and information collected by survey method with interview and quisionare as the main acitivity. The result of the study show that, internal and external environment has a good condition, it means that all of that factors will be support of the SMEs to doing a business. Based on the SWOT analysis, this study has found 10 strategic alternative that can be used for the SMEs which can be clustered in 5 primary strategies. There are the ease of getting a cheaply product, precise information about of industry growth, increase the promotion activity with high technology, increase the education, skills and capability include in the marketing processes or firm growth as well increase the governments role. We discuss our findings and provide directions for future research.