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Abstract: This study attempts to explore and examining about Indonesia Small and Medium Enterprise (SME) performance through relationship with strategic management theory. We apply strategic management model into our research to explain the relationship of firm performance with firm determinants. Firm strategy, external environment factors and internal resource factors of firm will be used as determinant of firm performance. Samples from Indonesia SME are collected and statistical analysis is applied to produce valid results. Result shows direct positive relationship of firm strategy and internal factors of firm with firm performance. Direct positive relationship of external and internal factors of firm with firm strategy also recorded. Our finding shows that high perform firms of Indonesia SME tend to use differentiation strategy, emphasize on organization assets and human resource capabilities, and focus more on customer needs.