Competitiveness is the ability of a business entity to outperform rivals using its advantages to achieve its goals.
This concept is one of the integral characteristics that can be used in evaluating the economic performance of representatives of the business sector. In other words, competitiveness is the ability of a subject to withstand competition.
Approaches to the concept of "competitiveness"
In the thematic economic literature, you can find a variety of approaches to the definition of this concept:
- as a result of the analysis of the features of the choice of the subject of the research itself, which leads to the choice of the subject of competition (goods or services), subjects (enterprises, organizations, industries or the national economy as a whole), etc.
Distinguish competition at the level of:
At the country level, competitiveness is the ability of the state to produce such goods and services that meet the requirements of the global market, which would create conditions for increasing resources and ensure stable growth rates of the quality of life of people and GDP.
The competitiveness of a region is a similar formulation, but in this case all concepts are given at the regional level, and instead of GDP, it is about the growth rate of GRP.
Considering the competitiveness of the organization, it should be noted that this is the ability of a business entity to achieve its goals in an often tough competition. In this case, we can talk about meeting the needs of consumers in the production process and the supply of goods that have certain advantages over their counterparts in the market.
The competitiveness of an organization should be considered as a combination of all the main characteristics of the enterprise itself, which can be determined by its potential, external socio-economic and organizational factors that allow creating products attractive to consumers.
And finally, the competitiveness of the product - its ability for buyers to be attractive in comparison with other products due to quality and cost characteristics, as well as consumer ratings.
To achieve a certain success in a modern market economy, the decisive element should be the effective use of various factors that influence competitiveness, namely:
- communicative policy of rival companies;
- the development of new products and the assignment of trade brands and brands;
- the attractiveness and quality of the packaging of goods;
- the effectiveness and organization of service policies of competing firms;
- organization of sales of products from rivals and its main indicators;
- rationality of the channels of movement of goods from similar enterprises in the market.
In other words, the factors of competitiveness reflect the indicators that are involved in the specific struggle of entrepreneurial structures against the demand of their own products, expanding the circle of customers and increasing their share in the modern market.
The factors affecting the efficiency of business activities of various business structures that can use the analysis of competitiveness include:
- government factors expressed in economic methods (for example, depreciation and tax policies, financial, credit and investment policies, targeted programs and customs policies) and administrative legal methods (certification, standardization on the legal basis);
- market factors determined by the type and capacity of the market, competitors, labor resources, labor market, income level and industry characteristics;
- socio-political factors in the form of public organizations, political stability, level of culture and social status.
Conducted assessment of competitiveness can use the following internal factors:
- the organizational structure of the enterprise (for example, financial, economic and production and technological potential, as well as material and technical support);
- the innovation factor, expressed in personnel potential, control and analysis of innovations, the system of certificates and standards;
- quality of service and operation in the form of packaging, storage, transportation of products, environmental products, recyclability, etc.
Competitiveness is associated with many controversial issues. First of all, it is the determination of the adequacy of the entire production and technical structure to the requirements in the field of marketing, the assessment of the possibility of effective resource conservation in the production of high-quality and economical products.
Secondly, increasing the level of rivalry of enterprises can influence the degree of awareness by employees of the organization's strategy and its goals.
Thirdly, improving the competitiveness of the regulatory framework depends on the regulations, technological and methodological documentation, as well as various qualities of the finished product.
Fourthly, competition in the field of information resources can be expressed in a certain practical applicability, consistency and power of attorney.
Improving the competitiveness of the enterprise
The success of any entrepreneur depends on such an important factor as the internal environment, which is directly dependent both on the entrepreneur himself and on his competence, determination, will power, skills and abilities in the business process. In this case, it is necessary to mention that the increase in the competitiveness of an enterprise is influenced by strict adherence by the entrepreneurs themselves and their managers to the regulatory acts that are responsible for regulating the activities of this or that business or organizational-legal form.
These indicators can be manifested in the organizational-economic and technical-technological areas of the entrepreneur in the form of profit, high profitability and sales growth. Evaluation of competitiveness allows using modern technologies to reduce the cost of finished products, the effective use of certain market segments, as well as rapid adaptation to its changes.
An important criterion for grouping competitive advantages is a basic condition that determines the nature of the source of their manifestation. The following types of advantages are known for this feature:
- economic orientation (state of the market, government policy, market factors that have a stimulating effect on demand, as well as the degree of allocation of funds of the enterprise);
- regulatory benefits provided in the form of benefits, subsidies, subventions, customs legislation;
- the structural nature of competitiveness, expressed in the integration of the production process and the sale of finished products;
- administrative nature, manifested in the limitations of the municipal and state authorities in issuing licenses and patents, quotas, etc .;
- technical character in the form of technical and technological features of production.