This study explains the role of institutional performance and new product development (NPD) value chain strategies to enhance entrepreneurial competitive advantage. The analysis was based on survey data on 125 entrepreneurial households, taken using the multi-stage random sampling technique in Central Java and Yogyakarta. The path analysis model is used to explain the role and strategy used quantitatively. It was supplemented by a value chain analysis (VCA) model based on a supply chain management (MSC) approach in a more classical, linear, complex, and descriptive sub-sector analysis. The results show that the NPD factors significantly contribute to increasing the entrepreneurial competitive advantage. Furthermore, the NPD value chain strategy, apart from benefiting managers, provides employment opportunities and new markets to the community holistically. Its chain strategy changes the role and atmosphere of people's lives more humane.