Экономические науки/
Экономика предприятия
Kiforenko O. V.
Uman National University of Horticulture
COMPETITIVENESS AS AN IMPORTANT
COMPONENT OF MARKET ECONOMY.
Competitiveness
is the way an enterprise can realize its products and services at the national and
international markets with the best benefit possible. Here such factors as
prices, development, location, research, service and quality play an important
role.
On the other hand
competition is the rival of the market participants for resources, customers,
market sectors and so on. As soon as a provider suggests a customer better
goods or services at lower prices competition takes place. There are many types
of competition but the most important ones, to our mind, are price, service or
design competition. Not only outside competition pressure but also inside
forces lead to the development of competitive advantages if compared with the
competitors, that is to competitiveness.
Let’s take, for
example, price competitiveness. We can say that an enterprise is price
competitive if it can market its products or/and services for prices that cover
productive costs and bring yield to the invested capital. Price competition is
especially important at the markets where standardized goods are sold. Trade
enterprises increase their competitiveness through differentiated margins.
Such types of non-price competitiveness as
quality, service, design and others are also very important for products and
services selling. This type of competitiveness is especially important at the
markets where different kinds and variations of the products are sold.
While researching
the notion of competitiveness of an enterprise it should be decided what
problem is to be paid special attention to:
- the
competitive position of an enterprise (the place at the market on the
background of competitors);
- the
competitive potential of an enterprise (the means of competing the competitors);
- the
competitive strategy of an enterprise (the means with the help of which
companies compete with their competitors).
Amid uncertainty in the
global economy and a continuing shift in the balance of economic activity
competitiveness becomes one of the most important features defining the level
of an enterprise functioning at the market. At the same time competitiveness is
considered to be the development determinant. The competition between
enterprises is an immanent feature of the market economy. Depending on the
branch it can take place on different levels and displays in different forms
and methods of operation. From the point of view of practice it is important to
know and understand what conditions and factors influence competitiveness of an
enterprise.
The competitive position
of an enterprise should be considered as a function of an enterprise in the
definite sector of economy or as its chances of development compared with its
competitors. The competitive position informs us how an enterprise uses its
resources, skills and competences to meet the clients’ requirements and deals
with its competitors. There are two approaches to the evaluation of the
competitiveness level of an enterprise. The first one, the so-called market
approach, seeks the sources of success in the ability of an enterprise to
adjust to the external conditions analyzing its market share and clients’
loyalty. The second one, the so-called resource-based approach, evaluates the
success possibilities the enterprise itself possesses. The resource-based
approach is about how well an enterprise can select suitable resources and how
effective it can use them.
One of the ways to
identify the competitiveness level of an enterprise if compared with its
competitors is to analyze the model of competitiveness structure – the model of
M. E. Porter, the so-called M. E. Porter’s model of five forces. It can be represented
in the following scheme:
Source (3)
Some scientists
understand competitiveness of an enterprise as a system of four elements:
- competitive
potential;
- competitive
advantage;
- instruments
of competitiveness;
- competitive
position of an enterprise at the market.
Competitive potential of
an enterprise can be understood as a system of material and non-material means
that make an enterprise possible to use optimal instruments to successfully
compete at the markets. Competitive potential means how effective an enterprise
can compete, how many necessary means and resources an enterprise possesses and
how efficiently it can enrich the amount of its means and resources.
Competitive strategy
means the main sources of competitive advantage of a company on the basis of
the deep analysis of an enterprise and its external environment to achieve its
aims. In his 1989 classic Competitive Strategy: Techniques for Analysing
Industries and Competitors, M. E. Porter speaks about three best strategies: cost
leadership, differentiation and market segmentation (or focus) [4]. Cost
leadership includes:
-
investment into new technologies;
-
cost control;
-
cost minimization;
-
cost reducing.
Differentiation can be
understood as the details that distinguish one product or service from another
(brand, technology, customer service).
Market segmentation is narrow in scope while
both cost leadership and differentiation are relatively broad in market scope.
It is a matter of common
knowledge that there are no universal models of successful strategy of
enterprise development that would guarantee every enterprise the highest level
of competitive advantage or accomplishment of market success. If they existed,
that would eliminate competitive advantage. But it is of vital importance for
every enterprise to pay special attention to what and how its competitors do
and to learn their effective methods of conduct. It is also important to
possess actual knowledge about the factors and conditions that influence the competitiveness
of an enterprise.
REFERENCES
1.
Maja Sajdak Identyfikowanie pozycji firmy na tle konkurentów // http://twojbiznes.infor.pl/index.php/dzialy/praktyka/artykul-1104246.html
2.
Waldemar Walczak Analiza czynników
wpływających na konkurencyjność przedsiębiorstw // http://www.e-mentor.edu.pl/artykul/index/numer/37/id/784#oautorze.
4.
http://en.wikipedia.org/wiki/Porter_generic_strategies