The advantages of tempeh as a high nutritious food and has an additional value for preventing various diseases, especially degenerative disease, makes many participants from all over the world eager to do research. The research is purposely to explore the potential of tempeh. Indonesia, the origin country of tempeh, had to anticipate the development that occurs in the free market. This under doing study could threaten the local industry of tempeh if other countries are developing tempeh modernly and competing with Indonesia's tempeh.In order to identify the ability to compete of Indonesia's tempeh, it can be analyzed with the Nine Model Factors by Dong Sung Cho. This model is the improvement of the Diamond Porter's Model, which created to analyze among third country such as Indonesia. The Nine Model Factors divides competitive resources into two large groups, which are the physical factors and human factors. Physical factors consist of natural resources, business environment, its related industry and its support, and also domestic's demand. Human factors analyzed into workers, politicians and bureaucracy, businessman, as well as manager and professional engineer. In order to analyze, the data are being taken by performing interviews, observations, and library study. To limit the scope of observation, so the tempeh makers has been taken from the member of South Jakarta Prim-KOPTI with Judgment Sampling. Japan is the country which used to compare the product.Based on Nine Model Factor analysis, product resources is achieved and being given to Indonesia supports the integrity this industry as well as domestic demand and business environment. From worker sector, tempeh makers which publicly 80% of them are elementary graduated, makes product innovation process quite hard. To protect the presence of tempeh maker, government has shield of the private opportunity to develop tempeh industry in modem way. This matter is not profitable because if its done with machinery so it will create product standardization and could reach the global market. The potential of tempeh market is widely open to Japan because Indonesia's tempeh has its own supplementary by doing two times fermentations while in Japan only one fermentation.Based on the reseach result it could be concluded that Indonesia's tempeh still having competitiveness in term of 'fresh tempeh', but Japan will threatened Indonesian tempeh industry with its second and thirth generation of tempe which only taking the component from tempeh. The demanding Japanese consumers will make producers more innovative and developing the product continuously. Hence, to create a conclusive climate performance in tempeh industry, it is better to consider HKTI ideas of 30% import tax of soy bean, and protective policies for the tempeh makers is necessarily reevaluate and develop tempeh industry in Indonesia.