Latar belakang: Pertumbuhan ekspor obat tradisional Indonesia selama periode 2009- 2013 mengalami kenaikan sebesar 6,49% per tahun. Di Indonesia Industri Obat Tradisional (IOT) merupakan salah satu sarana yang berperan memproduksi dan mengembangkan obat tradisional yang aman, bermutu dan bermanfaat. IOT sebagai industri andalan penggerak ekonomi nasional. Tujuan: Menganalisis gambaran faktor yang mempengaruhi daya saing IOT, memberikan alternatif strategi dalam peningkatan daya saing IOT. Metode: Penelitian ini merupakan studi deskriptif dengan metode analisis kualitatif melalui wawancara mendalam, Focus Group Disscusion (FGD), penelusuran dokumen. Hasil: Faktor sumber daya; kondisi permintaan; industri terkait, industri pendukung; struktur, persaingan, strategi perusahaan; peran pemerintah dan faktor kesempatan memiliki keterkaitan dan saling mendukung. Teridentifikasinya SWOT untuk menyusun alternatif strategi peningkatan daya saing IOT. Kesimpulan: Daya saing IOT dinilai masih kurang, kurangnya dukungan faktor kondisi sumber daya (modal), faktor industri/sarana pendukung dan terkait, faktor pemerintah, faktor struktur, strategi dan persaingan. Peran pemerintah mempengaruhi semua komponen. Diperlukan adanya peningkatan koordinasi akademisi, pengusaha, pemerintah dan masyarakat. Kata kunci: Daya saing, Industri Obat Tradisional (IOT), Obat tradisional Background: The growth of Indonesian traditional medicine exports during 2009-2013 period increased by 6.49% per year. In Indonesia, the Traditional Medicine Industry (IOT) is one of the means that play a role in producing and developing traditional medicines are safe, quality and useful. IOT as the mainstay industry driving the national economy. Objective: Analyze the description of the factors that affect the competitiveness of IOT, providing an alternative strategy in improving the competitiveness of IOT. Method: This research is a descriptive study with qualitative analysis method to conduct in-depth interviews, Focus Group Discussion (FGD), tracking documents. Results: factor conditions; demand conditions; related and supporting industries; firm and strategy rivalry; government roles and opportunity factors are linked and mutually supportive. SWOT identification to develop alternative strategies to enhance IOT competitiveness. Conclusion: The competitiveness of IOT is still lacking, lack of support of factor conditions (capital), related and supporting industries, government roles, firm and strategy rivalry. The role of government affects all components. Enhanced coordination of academia, entrepreneurs, government, and society is needed. Keywords: Competitiveness, Traditional Medicine Industry (IOT), Traditional medicine