The purpose of this research is to develop a comprehensive partnership strategy integration model that includes corporate partnerships with external parties as well as partnerships within the company, which is based on one of Bali's local wisdom values, namely "Tat Twam Asi" values which is associated with competitive advantage and business performance. The approach used in the analysis and synthesis of the literature on the concept of partnership strategy, the concept of local wisdom values "Tat Tvam Asi", competitive advantage, and business performance. The research was conducted on SMEs in the handicraft sector in Bali to clarify the implementation of a partnership strategy based on local wisdom values.  The result of the research is the development of a conceptual model of an external and internal partnership strategy based on the values of "Tat Twam Asi" to achieve competitive advantage and improve business performance. The limitation of this article lies in only a conceptual model development based on previous empirical studies. The implication of this research is that it can help the next researcher to test the validity of the resulting model.