<![CDATA[Micro enterprises face increasingly competitive business environments, requiring them to develop capabilities that create customer value and sustain competitive advantage. This study aims to examine the effects of product innovation and service quality on the competitive advantage of micro enterprises, both partially and simultaneously. A quantitative associative approach was employed. Data were collected through questionnaires from 100 micro-enterprise owners selected using purposive sampling. The data were analyzed using multiple linear regression, t-test, F-test, and the coefficient of determination. The results indicate that product innovation has a positive and significant effect on competitive advantage, with a regression coefficient of 0.382 and a significance value of 0.000. Service quality also has a positive and significant effect, with a regression coefficient of 0.447 and a significance value of 0.000. Simultaneously, product innovation and service quality significantly affect competitive advantage, as indicated by an F-value of 38.742 and a significance value of 0.000. The coefficient of determination of 44.5% indicates that the two variables explain part of the variation in competitive advantage, while the remaining variation is associated with other factors outside the research model. These findings suggest that strengthening the competitiveness of micro enterprises requires continuous product development based on customer needs, combined with consistent improvement in service quality. ]]>
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