The purposes of the study was to find out the explanation of ceramic entrepreneurs' respond to the environment factors affecting competitiveness of small scale ceramic industries (SSCIs). The environment factors are internal and external then form a strategy. The research was carried out in Malang using a survey and case study. Data were collected using questionnaire and in-depth interview from 107 SSCIs that was chosen randomly chosen from 180 registered SSCIs. Structural Equation Modeling

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... ) with AMOS software was used to analyze data. The research results showed that environment factors were both directly and indirectly affecting SSCI's competitiveness through strategy. In order to increase competitiveness then SSCIs need to empower the existing producers' association in some aspects such as provision of raw material, pricing the products, and marketing. Training, education, and research need to be developed and improved by local government and higher education institutions. Abstract in Bahasa Indonesia: Penelitian ini bertujuan mencari penjelasan tentang perilaku wirausaha keramik terhadap faktor-faktor lingkungan yang mempengaruhi daya saing industri keramik berskala kecil di Malang. Secara spesifik penelitian ini bertujuan mempelajari pengaruh faktor internal dan eksternal terhadap strategi dan daya saing serta pengaruh strategi terhadap daya saing industri keramik berskala kecil di Malang. Faktor-faktor lingkungan tersebut dapat dikelompokkan kedalam faktor internal dan eksternal perusahaan. Penelitian diambil dari 107 industri keramik berskala kecil yang dipilih secara acak sederhana dari 180 unit usaha yang ada di Malang. Data dikumpulkan menggunakan kuesioner dan wawancara mendalam. Variabel dalam penelitian dibagi menjadi 4 kelompok yaitu, faktor lingkungan internal dan eksternal dari usaha kecil, strategi dan daya saing industri keramik berskala kecil. Data yang diperoleh selanjutnya dianalisis menggunakan Structural Equation Modelling (SEM) dari paket software statistik AMOS. Penelitian ini menunj [...]