<span style="color: #231f20; font-family: Calibri; font-size: 11pt; font-style: normal; font-variant: normal;">To keep sustaining in the high competition, the small and medium scale enterprises (SME) must be able to know <span style="color: #231f20; font-family: Calibri; font-size: 11pt; font-style: normal; font-variant: normal;">the customer’s needs and wants. The SME having the market orientation will completely fulfill what the customers <span style="color: #231f20; font-family: Calibri; font-size: 11pt; font-style: normal; font-variant: normal;">want considering that market orientation is the commitment of the SME business actors to give the additional values <span style="color: #231f20; font-family: Calibri; font-size: 11pt; font-style: normal; font-variant: normal;">for the customers. It is demanded to support the organization innovation in order that it can create the positioning <span style="color: #231f20; font-family: Calibri; font-size: 11pt; font-style: normal; font-variant: normal;">excellence of the enterprise expected to determine the business performance. The goal of the research is to test a<br /><span style="color: #231f20; font-family: Calibri; font-size: 11pt; font-style: normal; font-variant: normal;">business performance model by taking into account the positioning excellence supported by market orientation and <span style="color: #231f20; font-family: Calibri; font-size: 11pt; font-style: normal; font-variant: normal;">organization innovation. The method used in this research is descriptive and explanatory method, using the craftsmen <span style="color: #231f20; font-family: Calibri; font-size: 11pt; font-style: normal; font-variant: normal;">in Binong Jati Knitting Centre as the research sample consisting of 203 craftsmen. The statistical analysis used was <span style="color: #231f20; font-family: Calibri; font-size: 11pt; font-style: normal; font-variant: normal;">serqual Equation Model with Lisrel 8,7 program. The result of the research shows that in the operation the business<br /><span style="color: #231f20; font-family: Calibri; font-size: 11pt; font-style: normal; font-variant: normal;">actors of Binong Jati Knitting SME pay little concern toward the market orientation in conducting their business; <span style="color: #231f20; font-family: Calibri; font-size: 11pt; font-style: normal; font-variant: normal;">the business actors in general have not owned the innovative enterprises shown by the product innovation and the <span style="color: #231f20; font-family: Calibri; font-size: 11pt; font-style: normal; font-variant: normal;">innovation in management process; the business actors have been able to place their e-Business in the high positioning <span style="color: #231f20; font-family: Calibri; font-size: 11pt; font-style: normal; font-variant: normal;">excellence. Meanwhile, the business performance of Binong Jati Knitting SME is not proper yet especially in the point<br /><span style="color: #231f20; font-family: Calibri; font-size: 11pt; font-style: normal; font-variant: normal;">of sales, profits, and market share achieved; the positioning excellence is influenced significantly positive by the market <span style="color: #231f20; font-family: Calibri; font-size: 11pt; font-style: normal; font-variant: normal;">orientation and organization innovation. In the effort to improve the business performance, SME is recommended to <span>implement the model simultaneously.<br /></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span>