This paper aims to intensively explore the factors that affect competitiveness for small and medium enterprises (SMEs) and how SMEs can improve their competitiveness in the context of an emerging economy like Vietnam. This study combined qualitative and quantitative methods and employed covariance base structural equation model (CB-SEM). The originality of this study is of great contributions including (1) Proposing the latest model for SMEs for improving their competitiveness, taking internal and external factors aggregation into consideration; (2) Research context particularly on emerging economy like Vietnam, an emerging economy with great economic and medical achievements that has received special attention from the world after a long period of fighting against the global Covid19 pandemic. More importantly, in the context of increasing competitive pressure due to global integration; (3) Deliverable of this study disclosed the overall decisive factors for firm’s competitiveness, both internal and external. More importantly, it revealed the impact mechanism of each factor to contribute to increasing firm’s competitiveness in some ways. This study provides the implications of this study are expected to make breakthrough contributions for SMEs in Vietnam to gain higher achievement, towards sustainability. Furthermore, the contributions of this study are also expected to be a valuable source of reference for SMEs in other emerging countries, as long as in similar economic settings. The findings are interested to business practitioners, economics and policy maker as an attempt to boost SMEs’ competitiveness in a systematic and sustainable manner by integrating multilevel powers of firm, industry and nation.