By means of programs, projects and funds for regional development, EU strongly encourages and enables the strengthening of competitiveness of small entrepreneurship, enhancement of entrepreneurial environment, promotion and training for entrepreneurship and crafts, and thereby the regional development itself. With EU support, it is possible to access faster the process of the undoubtedly needed business changes and to realize their objectives.Managers have to carefully examine the current situation and select that change route which they believe is the most appropriate for long term development – changing themselves.Copying others or following the trends in the surroundings with no selectivity applied does not yield the desired results. The success of changes rests upon the relevance of the responses to the questions what, how and when to change, how to cope with the predictable and unpredictable ramifications of change implementation, and how to manage the diversity of simultaneous and mutually interwoven changes. The paper aims to indicate at one of the possible ways of associating companies.Creating clusters enables enhancing the companies’ competitiveness. The paper's underlying hypothesis is that small and mediumsized business enterprises: the producers of toast, biscuits, long-life rolls in the Republic of Croatia; are under-utilizing the possibilities of strengthening the competitive advantage, i.e. they do not use the advantages of affiliations and of the joint market approach through associating into clusters. Proposed and elaborated in this sense is the cluster development model among small and medium sized business enterprises since through associating they strengthen their competitive capacities and move the development on both the local and the regional level which is encouraged by EU.
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