Factors that determine competitiveness and competitive advantages. Abstract: The competitiveness of the organization and the main factors of its competitive advantage
Competitiveness is the ability a certain object or subject to meet the needs of interested parties in comparison with other similar subjects and / or objects. Objects can be goods, enterprises, industries, regions (countries, regions, districts). The subjects can be consumers, producers, the state, investors.
Competitiveness can be determined only by comparing objects or subjects with others among themselves.
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Product competitiveness is a set of consumer and cost characteristics of a product that determine its success in the market. One of the components of competitiveness is the quality of products (services). Product quality- this is a certain set of properties of a product that can, to one degree or another, satisfy the required needs when they are used for their intended purpose, including recycling or destruction. The production activity of any enterprise in modern conditions depends on how successfully the problems associated with the competitiveness of products are solved. Only by solving this problem, the enterprise can function effectively and develop in a market environment. This is the reason for the relevance of the chosen topic. The successful operation of enterprises in a competitive environment depends on a system of interrelations of an external and internal nature. According to many scientists, integral factors and, above all, investment, innovation and financial factors have the greatest impact on the competitiveness of enterprises. The main requirements for achieving competitive production are: the use of advanced technology, modern management methods, timely renewal of funds, ensuring production flexibility, proportionality, continuity and rhythm of processes. Components of the competitiveness of the productEssence, indicators and factors of product competitivenessThe struggle for the consumer is, first of all, the struggle for the sphere of influence in the market, and it, in turn, depends on the low price and quality of manufactured products, that is, use value. In the course of competition, a social need for this product is established, an assessment is given with the determination of the price level. The strength of the company's position in the market is determined by the competitiveness of its products and the ability to compete. Competitiveness reflects the quality side of the products offered. Competitive is the product, the complex of consumer and cost properties of which ensures its commercial success in the market. A competitive product is a product that compares favorably with competitors in terms of quality and socio-economic characteristics. The indicators of the competitiveness of a product are: Competitive means high quality goods while maintaining a high wages and living standards. The most important factor ensuring competitiveness is the increase in the rate of labor productivity. Quality parameters, as a rule, are determined based on the interests of the manufacturer, and competitiveness parameters - on the basis of the interests of the consumer. The quality level and the technical level of products are set by the technical level modern production, and to assess competitiveness, it is necessary to compare it with the level of development of needs. For each product, it is necessary to assess its level of competitiveness in order to further analyze and develop a successful product policy. Competitiveness assessment consists of the following stages:
The competitiveness of a product largely determines the competitiveness of the enterprise itself, its financial and economic condition and reputation. Competitive sustainability of the enterprise contributes to the compliance of enterprise management and its technological structure. The greater the gap between the organization of enterprise management and the technical level of production, the faster it loses its competitiveness. The production and sale of competitive goods and services is a general indicator of the viability of an enterprise. However, the production of competitive products can be resource-intensive and costly, which in market conditions will inevitably lead to a decrease in efficiency, a decrease in profits, a deterioration in financial position enterprises. In this case, additional financing is required, which, as a result, reduces the competitiveness of the manufacturer. The use of intensive technologies, a high level of mechanization are necessary conditions for obtaining income from manufactured products. In order to produce goods at the level of world standards, new technologies and modern equipment are needed. This requires significant investments capable of ensuring not only the high quality of Russian goods, but also creating new jobs. The second group of factors are indicators of product quality, determined by the current standards, norms, recommendations. The third group of factors affecting the level of competitiveness include economic indicators that form the cost and price of goods. Ensuring the competitiveness of the enterprise is achieved through compliance with the fundamental principles of the market system and the reasonable use of factors affecting the efficiency and competitiveness of production. The main principles of enterprise competitiveness include: The process of forming competitiveness is a set of organizational and economic measures to bring production programs for the production of products of a certain volume, range and quality in line with the existing production potential. One of the main factors in the formation of competitiveness is the maximum use of competitive advantages. Competitive advantagesIn theory, there are two main types of competitive advantages of a commodity producer. The essence of the first is lower production costs due to concentration and better production technology, which means the ability to sell at prices lower than competitors. The second type of competitiveness is based on meeting the special needs of the buyer, his requests for a premium price. Competitiveness is part of the production process regarding the ways and methods of managing in the market of goods and services and is estimated by the mass of profit in relation to the consumed and used resources. There are also five factors identified by M. Porter that determine competitiveness.
In addition, M. Porter identifies the five most typical innovations that give a competitive advantage: The competitiveness of an enterprise is a relative characteristic that expresses the differences in the development of this enterprise from the development of competitors in terms of the degree to which their products meet the needs of people and in terms of efficiency. production activities. The competitiveness of an enterprise characterizes the possibilities and dynamics of its adaptation to the conditions of market competition. Let us formulate general principles that give competitive advantages enterprises are:
The place of product competitiveness in enterprise managementProduct Competitiveness ManagementThe competitiveness of a product is a decisive factor in its commercial success in a developed competitive market. A significant component of the competitiveness of a product is the level of consumer costs during its operation. In other words, competitiveness is a complex of consumer and cost characteristics of a product, which determine its success in the market. Since there are always manufacturers behind the goods, it is possible to speak with good reason about the competitiveness of the respective enterprises and the countries in which they are located. Any product, being on the market, actually undergoes a test for the degree of satisfaction of social needs: each buyer purchases the product that satisfies his personal needs to the maximum, and the entire set of buyers purchases the product that most fully meets social needs than competing products. In this regard, the competitiveness of a product is determined only by comparing the products of competitors with each other. In other words, competitiveness is a relative concept, tied to a specific market and time of sale. All buyers have their own individual criteria for assessing the satisfaction of their own needs, so competitiveness also acquires an individual shade. Competitiveness can only be determined by properties of significant interest to consumers. All product characteristics that fall outside the scope of these interests are not considered in assessing competitiveness, since they are not related to it. Exceeding the norms, standards and rules (provided that it is not caused by the upcoming increase in state and other requirements) not only does not improve the competitiveness of the product, but, on the contrary, often reduces it, as it leads to higher prices without increasing consumer value, which makes them appear useless to buyers. The study of the competitiveness of a product must be carried out continuously, in close connection with the phases of its life cycle. This is due to the need to timely catch the moment of the beginning of a decrease in the competitiveness of the goods and the possibility of making appropriate decisions (for example, withdraw from production, modernize the product, etc.). At the same time, it is assumed that the release of a new product before the old one exhausts the possibilities of maintaining competitiveness is, as a rule, economically inexpedient. At the same time, any product after entering the market begins to gradually spend its competitiveness potential. This process can be slowed down and temporarily delayed, but it cannot be stopped. Therefore, a new product is designed according to a schedule that ensures that it enters the market by the time a significant loss of competitiveness of the old product. Competitive marketing strategies at the corporate level aim to provide a competitive advantage of the enterprise in the market relative to competing firms. The meaning of competitive strategies is the ability of an enterprise to maintain a certain market share (or market segment) or increase it. Competitive advantage is achieved by the enterprise by solving the following issues:
To solve these problems and manage the competitive position of organizations, the following models can be used:
Ways to ensure the competitive advantage of productsBased on the general competitive matrix of M. Porter, the competitive advantage of an enterprise in the market is provided in three main ways: 1). Product Leadership- based on the principle of product differentiation. In this case, the focus is on:
When the value of the product in the eyes of the consumer increases, he is ready to pay a higher price for the desired product. At the same time, a price increase that is acceptable to the buyer must be greater than the increase in the costs of the enterprise for the production and maintenance of the element of differentiation. The combination - high utility and high price - forms the "market power" of the product. Market power protects the manufacturer from competition, provides the company with a stable position in the market. Marketing management then aims to constantly monitor consumer preferences, control their "values", as well as the life of the elements of differentiation corresponding to this value. 2) Price leadership. This path is provided by the enterprise's ability to reduce production costs. Here the main role is given to production. Close attention is directed to:
Cost reduction is based on the use of the "experience curve" (the cost of producing a unit of output falls by 20% every time the volume of production doubles), as well as the "law of experience" derived from it. The law of experience states: "The unit cost of obtaining added value for a standard good, measured in constant monetary units, decreases by a fixed percentage for each doubling of output." 3) Niche leadership manifests itself in focusing a product or price advantage on a specific market segment.. Moreover, this specialized segment should not attract much attention from stronger competitors. Such leadership, as a rule, is used by small businesses. Niche leadership can also be used by large organizations to highlight a narrow group of consumers (professionals, people with a certain income level, etc.). The type of strategy directly depends on the position occupied by the enterprise in the market, and on the nature of its actions. According to the classification proposed by F. Kotler, the market leader occupies a dominant position in the market and makes the greatest contribution to its development. The leader often represents a "point of reference" for competitors who attack, imitate or avoid him. The leading enterprise has significant strategic opportunities. Market leader pursuer- this is an enterprise that does not currently occupy a dominant position, but wants to attack the leader. Occupying a certain position in the market, enterprises choose proactive (active) or passive strategies to ensure their competitive advantages (see table).
Now let's turn to pricing management. Competitive pricing is aimed at maintaining price leadership in the market. Here are the following methods:
Price wars are used, as a rule, in the market of monopolistic competition. When setting a price higher than that of competitors, a small number of buyers are attracted. If the price is lower than competitors, then competitors will respond in kind. The desire to attract consumers with low prices leads to low profits over time. Cream skim prices (or prestige prices) are set for new, trendy, prestige products. The calculation is aimed at those market segments where buyers will begin to purchase them, despite the high price level. As competitors offer the same products, this segment will be saturated. Then the enterprise will be able to move to a new segment or a new level of "cream skimming". The task is to stay ahead of competitors and maintain leadership in a certain area of the market. The cream skimming strategy is seen as both a cautious financial and marketing problem at the same time. The main advantage of this strategy is that it leaves the possibility of subsequent price adjustments taking into account market evolution and competition. From a marketing point of view, lowering the price is always easier than raising it. On the financial side, it allows you to quickly free up resources for use in other projects. Penetration pricing involves setting lower initial prices relative to competitors' prices. Penetration prices should create a barrier for competitors to produce similar products. The policy of low prices is more aimed at obtaining long-term profits (compared to the "quick" profits of high prices). The learning curve price is a trade-off between skimming and penetration. This approach involves a rapid transition from high prices to lower ones to attract a wide range of buyers and counter competitors. Product competitiveness assessmentMethods for assessing the competitiveness of productsThe assessment of competitive products reflects the relevant functional tasks: studying the situation (demand, supply, prices, market capacity, distribution channels), determining a set of consumer and economic indicators of competitiveness (natural, cost, relative), choosing a basis for comparing competitors (analysis of competitiveness indicators, choosing object as a basis for comparison, calculation of the integral indicator of competitiveness). The competitiveness of a product is assessed by comparing the parameters of the analyzed product with the parameters of the comparison base, since, as mentioned above, competitiveness is a relative concept. The need of buyers or a sample can be taken as a basis for comparison. A sample is usually a similar product that has the highest sales volume and the best marketing prospects. In the case when the need is taken as the base of comparison, the calculation of a single indicator of competitiveness is carried out according to the formula:
If a sample is taken as a comparison base, the value of the i-th parameter for the product taken as a sample is put in the denominator of the fraction. In the case when the product parameters do not have a physical measure, scoring methods are used to evaluate their characteristics. The method described above (differential) only allows us to state the fact that it is necessary to increase or decrease the parameters of a product in order to increase competitiveness, but does not reflect the influence of each parameter when a consumer chooses a product. A complex method is based on the use of group, generalized and integral indicators. At the same time, the calculation of the group indicator for technical parameters produced by the formula:
The calculation of the group indicator by economic parameters is carried out according to the formula:
Where Z, Z 0 are the total costs of the consumer, respectively, for the evaluated products and the sample. The total costs of the consumer include one-time costs for the purchase of goods (Z e) and the average total cost of operating the goods:
The mixed method allows you to express the ability of a product to compete in certain market conditions through a complex quantitative indicator - the competitiveness coefficient:
Thus, with the help of numbers, one can characterize the competitiveness of one product in relation to others. Comparison of goods is carried out using a comparison table of parameters. According to the results of the comparison by one of the three methods described, one of the following conclusions can be drawn: The conclusion on competitiveness is supplemented by conclusions about the advantages and disadvantages of the product being evaluated compared to similar ones, as well as proposals for measures necessary to take in order to improve the position of the product on the market. Based on the results of assessing the competitiveness of a product, the following decisions can be made:
The basis for assessing competitiveness is comparing the characteristics of the analyzed goods with a specific need and identifying their correspondence to each other. For an objective assessment, it is necessary to use the same criteria that the consumer operates when choosing a product on the market. Therefore, it is necessary to solve the problem of determining the range of parameters to be analyzed and significant from the point of view of consumers. Parameters for assessing the competitiveness of a productThe nomenclature of parameters used in assessing the competitiveness of a product consists of two general groups: Technical parameters include the parameters of a need that characterize the content of this need and the conditions for its satisfaction (see the figure below).
Brief description of the parameters: 1) The destination parameters characterize the scope of the product and the functions that it is intended to perform. These parameters are used to judge the content of the beneficial effect achieved through the use of this product in specific conditions of consumption. Destination parameters, in turn, are divided into:
2) Ergonomic parameters characterize the product in terms of its compliance with the properties human body when performing labor operations or consumption; 3) Aesthetic parameters characterize information expressiveness (rational form, integral composition, perfection of production performance, stability of presentation). Aesthetic parameters model the external perception of the product and reflect its external properties, which are the most important for consumers; 4) Regulatory parameters characterize the properties of the goods, regulated by mandatory norms, standards and legislation. The group of economic parameters includes the total costs of the consumer (consumption price) for the acquisition and consumption of products, as well as the conditions for its acquisition and use in a particular market. The total costs of the consumer in the general case consist of one-time and current costs. The final decision on the choice of the nomenclature of parameters for assessing competitiveness is made expert commission taking into account the specific conditions of use of these products and the purposes of the assessment. The scheme for studying competitiveness is presented below.
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Course work
Competitive advantages of the enterprise
Introduction
1. Theoretical foundations of the competitive advantages of an enterprise
1.1 The concept and essence of competitive advantages
2.2 Organizational structure JSC "Arnest"
Conclusion
As typical mistake when analyzing this problem, the concepts of competitiveness and competitive advantage become confused, so we will clarify these concepts.
“Product competitiveness is an integral Comparative characteristics product, a comprehensive assessment of its parameters (consumer, economic, organizational and commercial) in relation to market requirements or parameters of similar products. The real competitiveness of a product is determined only by comparing its parameters that are significant for consumers with the characteristics and terms of sale of similar competing products. ”
“Competitiveness is a property of an object, characterized by the degree of actual or potential satisfaction of a specific need by it in comparison with similar objects presented on the market. Competitiveness determines the ability to withstand competition in comparison with similar objects in a given market. ”
Competitiveness of the company - the ability to compete in the market with other manufacturers and suppliers of similar products, both in terms of the degree to which their goods or services meet the specific needs of customers, and in terms of business efficiency. It is most often evaluated by the company's specialists, and competitive advantages are evaluated by consumers who compare the offers of the company and its competitors. In this sense, the concept of competitive advantage is also relative. Competitive advantages make it possible to achieve greater consumer loyalty; accordingly, they largely determine the company's competition strategy, i.e. the way she competes.
“Competitive advantage is distinctive features company and its product in the eyes of consumers. ”
“Competitive advantages of subjects can be hereditary, constructive, technological, informational, qualification, managerial, natural and climatic, etc.”
“The competitive advantage of a system is any exclusive value that a system possesses that gives it superiority over its competitors. ”
“Key competitive success factors are commonly referred to as factors arising from market requirements that can give the company an advantage over its competitors. ”
“Rivalry among existing competitors often comes down to striving to achieve an advantageous position by all means, using the tactics of price competition, promotion of the product on the market and intensive advertising. “
“Knowledge of the company's capabilities and sources of competitive influence will allow you to identify areas where the company can go into open confrontation with competitors, and where it can avoid it. If a company is a low-cost producer, it will be able to oppose the power of consumers because it will be able to sell them products that are not vulnerable to substitute products. ”
The sources of competitive advantage are diverse, but most often they are based on:
On operational efficiency, i.e. performing similar activities better than competitors (quality of service or product quality, hours of operation and location, speed of service, cost advantage, etc.);
Strategic positioning, i.e. carrying out activities that are separate from competitors or carrying out similar activities, but in other ways. Strategic positioning is based on a competitive advantage (key competitive advantage). This may be the uniqueness of a product or service, brand image, technological leadership, a unique combination of activities, etc.
So, the company's offer must be meaningful to consumers in order to be classified as a competitive advantage. However, the degree of significance varies.
“In order for a certain factor to become a competitive advantage of a company, it is necessary that it has key value for consumers and at the same time based on the uniqueness of the company's business. ”
The most cited author in foreign and domestic literature on the theory of competition, management of competitive advantages is M. Porter. In the next paragraph of the course work, Michael Porter's theory of competitive advantage will be considered.
1.2 Michael Porter's Theory of Competitive Advantage
To survive or win in a tough competition, any system must have certain advantages over its competitors. AT last years Almost every book on competition, competitive advantage, or competitiveness has references to Michael Porter's seminal book International Competition.
M. Porter proposed a set of typical strategies based on the idea that each of them is based on a competitive advantage and the company must achieve it by choosing its own strategy. It must decide what type of competitive advantage it wants to gain and in what area.
“Thus, the first component of the strategic choice under this model is a competitive advantage, which is divided into two main types: lower costs and product differentiation. ”
“Low costs reflect a firm's ability to develop, produce, and sell a comparable product at a lower cost than a competitor. Selling goods at the same (or approximately the same) price as competitors, the company in this case receives a large profit. ”
Differentiation is the ability to provide the customer with a unique and greater value in the form of a new product quality, special consumer properties or after-sales service. Differentiation allows the firm to dictate high prices, which, at equal costs with competitors, provides greater profits.
Difficult, but still possible to gain a competitive advantage based on both lower costs and differentiation. However, any effective strategy must pay attention to all types of competitive advantage, although not strictly adhering to one of them. A firm focusing on low costs must still provide acceptable quality and service. In the same way, the product of a firm that produces differentiated products should not be so expensive as competitors' products as to be detrimental to the firm.
“The competitive advantage of a firm is determined by how clearly it can organize relationships with suppliers and customers. By better organizing these connections, the firm can gain a competitive advantage. Regular and timely deliveries can reduce a firm's operating costs and reduce inventory requirements. These links occur when the method of one activity affects the cost or efficiency of others. »
Relationships often lead to the fact that the additional costs of "fitting" individual activities to each other pay off in the future. Firms must incur such costs in line with their strategy in the name of competitive advantage.
M. Porter notes that firms get a competitive advantage:
Based in those countries that allow the most rapid accumulation of specialized resources and skills;
If the home country of the firm has more accessible and accurate information about the needs for goods and technologies;
If permanent investment is possible;
If the interests of owners, managers and staff coincide.
“Thus, one of the main goals of many organizations is to achieve an advantage over its direct competitors. The central question is this: how will the organization obtain this advantage? M. Porter answers this important question highlighting key overall strategies. ”
Three such strategies are cost leadership, individualization, and focus. Each of them will be discussed in the next section of the course work.
1.3 Strategies for achieving competitive advantage according to M. Porter
Strategies for achieving competitive advantages belong to the group of competitive strategies, which also include strategies for behavior in a competitive environment. Each of these strategies is based on the need to achieve a certain competitive advantage.
“Competitive advantages are understood as the unique tangible or intangible assets of the company or special competence in areas of activity that are important for this business (equipment, trademark, ownership of raw materials, flexibility, adaptability, staff qualifications, etc.). ”
Note that the competitive advantage modern firms do not always relate to production technology, very often they move to the stage of marketing, service, R&D, managerial and financial innovations. Competitive advantages are usually realized at the level of strategic business units. Consider the features of the main strategies for achieving competitive advantages.
Analyzing the competitive environment and determining the competitive position of an organization involves determining the complexity and dynamism of the competitive environment. The universal methods of such analysis are the five forces model of M. Porter and the cost analysis of competitors.
The five forces model involves conducting a structural analysis based on determining the intensity of competition and studying the threat of potential competitors entering the market, the power of buyers, the power of suppliers, the threat from substitutes for a product or service.
Competitor cost analysis boils down to identifying the strategic factors driving cost, cost analysis itself, and competitor cost modeling.
“To obtain a competitive advantage, a firm can use three general competitive strategies: cost leadership (the task is to achieve cost leadership in a particular area through a set of measures to control them), individualization (it is supposed to achieve a distinctness of the organization's product or service from the products or services of competitors in this area), focusing (the task is to focus on a specific group, market segment or geographic region). ”
Cost Leadership. When implementing this strategy, the task is to achieve leadership in terms of costs in their industry through a set of functional measures aimed at solving this particular problem. As a strategy, it involves tight control over costs and overheads, minimizing spending in areas such as research and development, advertising, etc. There is also a need for a whole layer of buyers who feel the advantage of low costs, expressed in prices.
A low cost position gives an organization good returns in its industry even if there is fierce competition in its industry. A cost leadership strategy often creates a new basis for competition in industries where fierce competition in various forms has already been established.
Individualization. This strategy involves differentiating an organization's product or service from those offered by competitors in the industry. As Porter shows, the individualization approach can take various forms including image, brand, technology, identity, special customer service, etc.
Customization requires serious research and development as well as marketing. In addition, buyers should give their liking to any product as something unique. The potential risk of the strategy is a change in the market or the release of analogues that competitors can initiate, which will destroy any competitive advantage that the company has already achieved.
“A focus strategy involves choosing a narrow segment or group of segments in an industry and meeting the needs of that segment more effectively than competitors serving a broader market segment can do. The focusing strategy can be applied both by a cost leader that serves this segment, and by a differentiator that satisfies special requirements segment of the market in a way that allows you to charge a high price. ”
So firms can compete broadly (serving multiple segments) or focus narrowly (targeted action). Both options for the focus strategy are based on the differences between the target and the rest of the industry segments. It is these differences that can be called the reason for the formation of a segment that is poorly served by competitors that carry out large-scale activities and do not have the ability to adapt to the specific needs of this segment. A cost-focused firm may outperform a consumer-oriented firm by its ability to eliminate "excesses" that are not valued in that segment.
If this strategy is chosen, the main task is to concentrate on a specific group of consumers, a market segment or a geographically isolated market. The idea is to serve a specific target well, not the industry as a whole.
It is assumed that the organization will thus be able to serve a narrow target group better than its competitors. This position provides protection against all competitive forces. Focusing can also mean cost leadership or product/service customization.
1.4 Strategies for achieving competitive advantage according to F. Kotler
F. Kotler offers his own classification of competitive strategies based on the market share owned by the enterprise (firm):
1. "Leader" strategy. The “leading” firm in the product market occupies a dominant position, and this is also recognized by its competitors. The leading firm has a set of strategic alternatives at its disposal:
The expansion of primary demand, aimed at discovering new consumers of the product, expanding the scope of its use, increasing the one-time use of the product, which is usually advisable to apply at the initial stages of the product's life cycle a defensive strategy that the innovator takes to protect its market share from the most dangerous competitors;
An offensive strategy, most often consisting in increasing profitability by maximizing the experience effect. However, as practice shows, there is a certain limit, above which a further increase in market share becomes unprofitable;
A demarketing strategy that involves reducing one's market share in order to avoid accusations of monopoly.
2. "Challenge" strategy. A firm that does not occupy a dominant position can attack the leader, i.e. challenge him. The purpose of this strategy is to take the place of the leader. In this case, the solution of two most important tasks becomes key: choosing a springboard for attacking the leader and assessing the possibilities of his reaction and defense.
3. The strategy of “following the leader”. A “follow-the-leader” is a competitor with a small market share that chooses adaptive behavior, aligning its decisions with the decisions made by competitors. Such a strategy is most typical for small businesses, so let's take a closer look at possible strategic alternatives that provide small businesses with the most acceptable level of profitability.
Creative market segmentation. A small firm should only focus on certain market segments in which it can better exercise its competence or have greater agility to avoid major competitors.
Use R&D effectively. Since small enterprises cannot compete with large firms in the field of fundamental research, they must focus R&D on improving technologies in order to reduce costs.
Stay small. Successful small businesses focus on profit rather than increasing sales or market share, and they tend to specialize rather than diversify.
Strong leader. The influence of the manager in such firms goes beyond formulating a strategy and communicating it to employees, covering also the management of the current activities of the company.
4. Specialist strategy, “Specialist” focuses mainly on only one or several market segments, i.e. he is more interested in the qualitative side of the market share.
It seems that this strategy is most closely associated with the focusing strategy of M. Porter. Moreover, despite the fact that the “specialist” firm dominates its market niche in a certain way, from the point of view of the market for this product (in the broad sense) as a whole, it must simultaneously implement the strategy of “following the leader”.
1.5 Classification of competitive advantages of the organization
The management of the competitive advantages of the enterprise is carried out according to the same management (management) functions as the management of other objects.
“The factors of the competitive advantage of the organization are divided into external, the manifestation of which to a small extent depends on the organization, and internal, almost entirely determined by the management of the organization. »
Table 1.1 List external factors organization's competitive advantage
| External factor of competitive advantage of the organization | What needs to be done to achieve and use a competitive advantage in Russia |
| Country competitiveness level | Open an organization in a country with a high level of competitiveness or increase the competitiveness of your country |
| The level of industry competitiveness | Take measures to increase the competitiveness of the industry or leave it for another, more competitive industry |
| The level of competitiveness of the region | Take measures to increase the competitiveness of the region or leave it for another, more competitive region |
| State support for small and medium-sized businesses in the country and regions | recycle legislative framework for small and medium-sized businesses, focusing it on efficient and law-abiding business conduct |
| Legal regulation of the functioning of the economy of the country and regions | Rework the legislative framework for the functioning of the economy as a system of codes and rights (competitive, antimonopoly, administrative, labor, etc.) |
| Openness of society and markets | Development of international cooperation and integration, international free competition |
| The scientific level of economic management of the country, industry, region, etc., the applicability of the tools of the new economy | Application of the economic laws of the functioning of market relations considered in topics 2-5, the laws of organization in statics and dynamics, 20 scientific approaches to management and specific principles for managing various objects, management methods at all levels of the hierarchy. If the leader does not master scientific methods, the performer will hardly master them. |
| National system of standardization and certification | Activation of work in this area, strengthening control over compliance with international standards and agreements, legal support for harmonization with the international system |
| State support for human development | To increase dozens of times in the Russian budget spending on education, healthcare and the social sphere |
| State support for science and innovation | Improve the transfer system (development of innovations, their innovation and diffusion), increase budget spending on science tenfold |
| Quality information support management at all levels of the hierarchy | Creation of unified national information centers for areas or industries National economy, corresponding last word science and technology |
| The level of integration within the country and within the global community | Russia's entry into international organizations and development according to international laws |
| Tax rates in the country and regions | Revise the tax system, if possible, dock and unify rates |
| Interest rates in the country and regions | Reconsider the system of interest rates at all levels of management and areas of investment |
| Availability of accessible and cheap natural resources | To increase the proportion of state-owned resources mined and subsoil to at least 50%. Improve government control over resource spending |
| The system of training and retraining of managerial personnel in the country | The receipt of international, state and sponsor investments in this area and their spending should be under state control and give a specific result. |
| Climatic conditions and geographical location of the country or region | Protect the environment natural environment, improve the quality of the living environment and develop competitive advantages in this area |
| The level of competition in all areas of activity in the country | Comprehensively form and implement market relations |
Table 1.2 List of internal factors of the competitive advantage of the organization
| Internal factor of competitive advantage of the organization | What needs to be done to achieve and use competitive advantage |
| production structure of the organization | Design organizations based on flexible production systems, from automated modules and systems |
| mission of the organization | The mission should contain an original idea, an exclusive field of activity, a competitive product, a popular trademark, a brand, etc. |
| organizational structure of the organization | The organizational structure should be built on the basis of the organization's goal tree with horizontal coordination of all work by the manager for a specific product (problem-target organizational structure) |
| Production specialization | Carry out the design of the organization based on the analysis of the principles of rationalization of structures and processes, using modeling methods |
| the level of unification and standardization of manufactured products and constituent parts production | Perform the whole range of work on the unification and standardization of various objects in order to streamline them according to standard sizes, types, methods, etc. |
| accounting and regulation of production processes | Include in the structure of the organization automation tools for accounting for compliance with the principles of proportionality, continuity, parallelism, rhythm of the flow of individual processes |
| staff | Constantly select personnel, improve their qualifications and create conditions for advancement, motivate high-quality and efficient work in order to ensure the competitiveness of personnel |
| information and normative-methodical base of management | When designing and developing structures, information systems should include high-quality information and regulatory and methodological documents |
| the strength of competition at the output and input of the system | When choosing a field of activity and suppliers of raw materials, materials, components, equipment, personnel, analyze the strength of competition and choose competitive suppliers |
Resource: suppliers access to high-quality cheap raw materials and other resources |
Constantly analyze the competitive environment, the number of suppliers, the strength of competition between them, their competitiveness to select the best. Monitor market parameters in order not to miss possible access to high-quality and cheap raw materials |
| accounting and analysis of the use of all types of resources at all stages of the life cycle large facilities organizations | Encourage such an analysis, since in the future saving resources for consumers of their goods will be a priority for the organization, a factor of competitive advantage |
| resource efficiency optimization | Support work on resource optimization, as global goal competition - saving resources and improving the quality of life |
| Technical: proprietary goods | Continue to work on increasing the number of inventions and patents |
| patented technology and equipment | To increase the proportion of progressive technological equipment, to reduce its average age |
| quality of workmanship | Apply modern methods quality control and incentives to maintain a competitive advantage |
| Managerial: managers | Increase the proportion of competitive managers |
| analysis of the implementation of the laws of the organization | Based on the results of the analysis of the laws of the organization, measures should be developed and implemented to improve processes |
| organization of the supply of raw materials, materials, according to the principle of "just in time" | Maintaining this competitive advantage requires a high degree of discipline throughout the entire material cycle. |
| functioning of the management system (competitiveness) of the organization | Develop and implement a system |
| functioning of the quality management system in the organization | Further retention of this competitive advantage requires highly qualified personnel, the use of scientific management methods |
| conducting internal and external certification of products and systems | The quality management system must comply with international standards ISO 9000:2000. scientific approaches and principles of quality management |
| Market: access to the market for resources needed by the organization | To obtain this advantage, it is necessary to study the parameters of the markets at the input of the system (organization), and to maintain it, it is necessary to monitor the market infrastructure |
| market leading position | To retain this main advantage, it is necessary to constantly take measures to retain all the competitive advantages of the organization. |
| exclusivity of the organization's product | This advantage is achieved by the high patentability of products, which, in turn, ensures their competitiveness in comparison with substitute products. |
| distribution channel exclusivity | This advantage is achieved by a high level of logistics, maintained by competitive marketers and sales workers. |
| exclusivity of advertising of the organization's products | To maintain the advantage, highly qualified advertising workers and sufficient funds for it are required. |
| effective system of sales promotion and after-sales service | The advantage is achieved by highly qualified economists, psychologists and managers of the organization. of course, the necessary means |
| Forecasting pricing policy and market infrastructure | In order to maintain this competitive advantage, it is necessary to analyze the effect of the law of demand, supply, competition, etc. on their products, to have a quality information base and qualified professionals. |
The effectiveness of the functioning of the organization: Profitability indicators (according to profitability ratios of products, production, capital, sales) |
Economic indicators determine the quality of the functioning of the organization in all aspects and areas. Therefore, in order to maintain its competitive advantages, the organization must improve the scientific level of management. |
| The intensity of the use of capital (according to the turnover ratios of types of resources or capital) | Levels of profitability, intensity of capital use and financial stability of the functioning of the organization are determined individually |
| financial sustainability of the organization | The higher the strength of competition in the industry, the lower will be the profitability and cost of goods, but the higher the quality of goods. |
| Share of exports of science-intensive goods | Competition is also a factor in increasing the efficiency of the use of all resources. |
Listed in Table. 1.1 and 1.2 external and internal factors of competitive advantage of the organization are the maximum possible for the abstract organization. For a particular enterprise, the number of competitive advantages can be any.
“The value of each benefit can be quantified and analyzed over time. However, it is hardly possible to integrate all the benefits into a single indicator. ”
In principle, the more an organization has competitive advantages over current and potential competitors, the higher its competitiveness, survivability, efficiency, and prospects. To do this, it is necessary to improve the scientific level of management, gain new competitive advantages and look more boldly into the future.
1.6 Key competitive success factors
Key success factors are commonly referred to as those factors arising from market requirements that can give the company an advantage over its competitors.
For example, a key factor may be "niche", i.e., unsatisfied needs of existing manufacturers that can be satisfied by the proposed product (or, more often, for which an entirely new product should be developed).
Thus, each firm finds a segment of the market that is not currently occupied and establishes itself in it, which ensures commercial success. Naturally, each time the "ecological niche" was significantly different.
Key success factors can also be changes in the distribution network, in the policy of choosing a commodity-producing system, etc.
“Key factors are always revealed by comparing your product and your company with competitors. After the comparison, the top administration decides on what indicators it should outperform its competitors, and on what indicators it should keep on par with it or even yield in some way. ”
It should be remembered that sometimes the key success factors are of such a nature that the company is not able to own them on its own. This casts serious doubt on the expediency of entering this market and should be the subject of close attention from the company's management.
“When managing key factors, first of all, it is necessary to find out which is the “external environment” or “ internal environment“Marketing is responsible for creating obstacles in the use of key success factors. Next, decide whether the company is able to change the existing state of affairs; if yes, develop a program of change, and if not, find out the possibility of working in another market or sector. ”
The role of the elements is very significant in this matter. internal structure firms that are called "responsibility centers". Very often, this is where the key success factors are hidden. Responsibility centers are those units that are assigned special tasks in achieving the planned financial performance.
Cost centers are production units that set standards for the consumption of materials and labor resources. The goal of the leaders of these centers is to minimize the deviations of actual costs from planned ones.
Sales centers are sales units that are prohibited from lowering prices in order to increase sales, but are ordered to strive for a maximum sales volume.
Discretionary centers are administrative divisions in which there is no way to strictly establish “cost/benefit” norms: here it is required to ensure the maximum good quality activities with the flexibility of the expenditure item of the marketing budget.
Profit centers - usually all divisions, one way or another tied to the lines of the "product orientation" structure, and the amount of profit is set based on those elements of marketing that the corresponding division is really capable of managing.
investment centers. In them, the measure of efficiency is "return on capital" (profit minus tax on capital employed). All these centers (divisions of the firm) are given such rights so that they can maximize the use of their resources. Thus, the key factors of competitiveness provide the company with competitive advantages, which explains the need for their use in the activities of the enterprise.
2. Management of competitive advantages in the organization
2.1 Characteristics of the activities of Arnest OJSC
The Arnest company is the Russian leader in the aerosol business in the field of high technologies, production volumes and product sales. The company spends a lot of time and money on the implementation of social programs. For more than 30 years, Arnest has been producing cosmetic products and household chemicals.
Form of ownership: private property. Organizational and legal form: open joint stock company.
“A joint-stock company is a company whose authorized capital is divided into a certain number of shares. Shareholders, i.e. shareholder this society, are not liable for its obligations, but bear the risk of losses associated with the activities of the company, within the value of their shares, i.e. have limited liability. ”
“Joint-stock companies are divided into open and closed. In the first case, the participants in the company can alienate their shares without the consent of other shareholders, in the second case, the shares are distributed only among the participants. Number of shareholders of an open joint-stock company unlimited. ”
Among the well-known brands: “Charm”, “Symphony”, “Lira”, “ destructive force”, “Garden”, “Mebelux”, etc. Through the active development of these brands, the company traditionally holds a leading position in the market for hair styling products, air fresheners, universal insecticides and polishes.
The assortment of the company is constantly being improved and today it has more than 350 product names. The high quality of products has been repeatedly confirmed by the most prestigious awards.
The enterprise is equipped with the most up-to-date high-quality equipment of leading European companies. The production capacity is 150 million aerosol packages and 15 million polymer bottles per year.
"Arnest" was the first in Russia to enter the international level of production and product quality control, has a certificate of quality system ISO 9001 and an environmental certificate of compliance with ISO 14001-98.
To date, the company's products are represented in all cities of Russia, the CIS countries, the Baltic States and Iran. Among the key partners of the enterprise are world-famous perfume and cosmetic companies in Europe: Schwarzkopf, L`oreal, Unilever, as well as the Russian concern Kalina.
The Arnest company is focused on the production of high quality products and strives to meet the needs of the consumer as much as possible. The use of the most modern innovative technologies allows Arnest to maintain the status of a leader in Russia.
The most important tasks of the company are:
Maintaining and improving leadership positions in the main segments of the aerosol market,
Unification of all employees of the Company on the basis of common business objectives, corporate values, principles, norms and rules,
Constant expansion of the presence in cosmetics, household chemicals and insecticides through geographic expansion and entry into new, potentially attractive markets and segments.
Arnest provides full complex product manufacturing services:
Acquisition or production at the enterprise of primary components (aerosol can or polymer bottle) and group packaging;
Acquisition of all types of raw materials from the best manufacturers from anywhere in the world, or work with tolling raw materials;
Additional cleaning at the enterprise itself and bringing hydrocarbon propellants to the required pressure;
Mixing the ingredients of the active substance and filling it into aerosol cans and polymer bottles on the lines of European manufacturers;
Prepress preparation and adaptation of designs to the requirements of Russian legislation;
Development of recipes according to the submitted consumer requests;
Certification of the finished product with the execution of the entire set of necessary documents;
Storage of the finished product in our own warehouses;
Development of optimal logistics schemes for the delivery of the finished product to the customer's warehouses.
The organization under study operates within the framework of an organizational development strategy and, in particular, a moderate growth strategy, the use of which implies agility; use of external resources; business diversification; expansion of basic research; concentration of efforts on the implementation of innovations.
Prospects for the further development of JSC "Arnest" are due to the growth in consumption of products by Russian and foreign buyers.
Despite the growth in the volume of manufactured products, the company has not yet reached the required level of implementation, which allows the team to consistently and purposefully solve the tasks of managing competitive advantages that it faces.
2.2 Organizational structure of OJSC"Arnest"
The functions of managing the activities of an enterprise are implemented by departments of the management apparatus and individual employees, who at the same time enter into economic, organizational, social, psychological relations with each other.
The organizational structure of the personnel management system is a set of interrelated divisions of the personnel management system and officials.
noted high degree centralization of control. Management principles that form the basis of the organizational structure:
Hierarchy of management levels, in which each lower level is controlled by a higher one and is subordinate to it;
Correspondence of the powers and responsibilities of management employees to their place in the hierarchy;
Division of the labor process into separate functions and specialization of workers according to the functions performed;
Formalization and standardization of activities, ensuring the uniformity of the performance of their duties by employees and the coordination of solving various problems.
The Management Board is headed by the President and consists of several members appointed by the Board of Directors. It manages certain areas of work, its members take part in resolving issues at meetings of the board. The Management Board submits to the General Meeting of Shareholders an annual report, a balance sheet and a profit distribution plan. Board functions: current planning; management of research work, production, sales; development of a specific course of action, programs and methods; making decisions on organizational forms of management; delegation of authority to officials at lower levels of management; implementation of personnel policy; control over the state of the financial position of the company; approval of company budgets; control over the profitability of operations; ensuring intercompany communications and settlements.
The most important criteria for the quality of the board's work are: ensuring stable profits, optimal sales volume, high quality and novelty of products, as well as services provided to the consumer.
The middle level of management is designed to ensure the efficiency of the functioning and development of the company by coordinating the activities of all departments.
Central services are functional services that carry out the most important management functions: marketing, planning, coordination, accounting and control, management of the provision of scientific, technical and production and marketing activities. The activity of the central services is based on the coordination of the work of the relevant departments in the production departments. The main activity of the central services is the implementation of functional links:
The lower level of management is focused on the operational solution of tasks for the organization economic activity within the framework of structural divisions, the main task of which is to fulfill the established tasks for the production of products and profit.
Production departments include smaller divisions - departments, sectors. The departments are headed by managers who have complete independence in solving current problems.
2.3 Marketing strategy and goals of JSC "Arnest"
In the context of the development of market relations, CJSC Arnest pays special attention to the operational and almost daily analysis of various aspects marketing activities enterprises.
The highest, the main goal of the enterprise in a market economy is to maximize profits. However, at certain stages of development and functioning of the organization, there are intermediate goals, for example: to ensure break-even work; win a large share in the market of goods and services; regulate the product offer in accordance with demand; expand the sales market; to ensure the maximum growth of indicators;
Each of these intermediate goals always acts as a means to achieve the main (main) goal. The main strategic goal of JSC "Arnest" is to maintain long-term competitiveness in the Russian market of the aerosol business. To achieve this goal, Arnest OJSC implements the following strategies:
1. Orientation to the Russian market and the CIS market, growth through development on the expansion of the domestic market.
2. Increasing the volume and share of sales of products for export.
3. Client-oriented development strategy - the implementation of corporate orders for the manufacture of products, the creation of discount systems, the development and implementation of discounts for regular customers of company stores.
Marketing strategy of OAO “Arnest”:
Increasing the number of sales while reducing production costs;
Concentration on a promising market segment;
Product differentiation;
Development of discount systems and customer cards for buyers;
Creation of a club of like-minded clients;
Creation of a client-oriented strategy.
2.4 Analysis of the market and competitive environment of OJSC “Arnest”
Continuous monitoring of the competitive environment is a necessary condition for an analytical assessment of the market situation and orientation of production to meet the needs of the market in the most efficient way.
To ensure quality management at the enterprise, promising strategies in the field of competitiveness should be developed, as well as the necessary organizational measures for all aspects of economic management.
The main competitors of the enterprise are: "Zavodbytovoykhimii" LLC, "Dzerzhinsky Plant of Household Chemistry" CJSC, "Spektr" CJSC, "Vershina" LLC, "Household Chemicals Factory" CJSC. The figure shows the occupied share of Arnest OJSC in the market of aerosol products manufacturers, as well as the share occupied by its main competitors.
Rice. Distribution of market shares
Increasing competition while simultaneously expanding the market for aerosol products creates additional requirements for updating the range and improving product quality. The advantages of competitors can lead to the loss of customers, both existing and potential; and also lead to loss of market share.
To prevent this from happening, the company must find and eliminate the reasons for lagging behind competitors, as well as try to "get around" the competitor with other advantages.
“Consumer organizations tend to have clear guidelines for buying goods in such markets. These are the popularity of goods, the reliability of the seller, the stability of quality, the certainty of delivery, the availability of prices. However, under certain conditions, certain specific factors may acquire greater significance. ”
In essence, any superiority over competitors is achieved through innovation, and therefore the ability to introduce new technical and technological elements in the activities of an enterprise that provide market advantages is a necessary component of the competitiveness of an enterprise. In a highly competitive environment, superiority in quality, price and sales areas is today a life-supporting factor for success in the market.
2.5 Quality policy of JSC "Arnest" as a competitive advantage
The priority goal of Arnest OJSC is to meet the requirements and expectations of consumers and other interested parties, to maintain the company's image on this basis and increase the competitiveness of products.
To achieve this goal JSC "Arnest" carries out:
Constant updating of the assortment, increase in the output of new types of products;
Introduction of new technologies based on modern equipment;
Compliance with the requirements of environmental legislation and other mandatory requirements in the field of ecology;
decline negative impact its activities on the environment;
Formation of ecological culture of personnel;
Training of all employees on quality and environmental issues;
Involvement of personnel in quality improvement activities;
Formation of mutually beneficial partnerships with all stakeholders;
Improvement of the integrated quality management system of JSC "Arnest", in relation to perfumery and cosmetic products and household chemicals, in accordance with the requirements of GOST R ISO 9001-2001 and GOST R 14001-98.
The management of OJSC "Arnest" undertakes to follow this Policy and provide the necessary resources and conditions for its implementation by all employees.
The Russian company "ARNEST" declared itself as a high-level enterprise, having received in 2000 a certificate of compliance with the requirements of the international quality standard ISO 9001-96.
In April 2003, the quality management system was recertified according to new version ISO 9000 series standards.
In December 2004, the environmental management system of JSC "Arnest" was certified for compliance with the requirements of ISO 14000 series.
Obtaining these certificates means that the company cares not only about the quality of its products, but also about the environmental situation in the region.
The reliability of products is ensured by the types of control existing at the enterprise, ranging from the input control of raw materials and materials to the control of finished products.
Compliance of products, semi-finished products, parts, raw materials with international standards is controlled through an extensive network of documentation. Mandatory requirements for products are provided:
The reliability of the packaging and the composition of the product guarantees the safety of life and health of customers.
The manufacture of products on an ozone-friendly propellant contributes to environmental protection.
2.6 Competitive advantages of Arnest Company
The main competitive advantages of Arnest are:
Presence of own strong brands in the main market niches;
Availability of ISO 9001-2001 (quality management system), ISO 14001-2000 (ecology);
Own production of aluminum cylinders. In Russia, apart from OAO "Arnest", such production exists only at one plant. It should be emphasized that almost half of all aerosol products can only be filled into aluminum cans. This applies to styling mousses (foams), deodorants and antiperspirants, a number of antistatic agents, some cleaning products, and all other products with an aggressive formulation. In addition to the uniqueness of aluminum cylinders, their production has a much higher mobility compared to the production of tin cylinders, which is based on the initial printing on tin with subsequent folding and soldering of rolled sheets;
Own production of European standard valves and spray devices, including heads of several configurations, caps and spray caps of several types. JSC "Arnest" has implemented a full cycle of production of valves and nozzles, which allows not only to fully meet the needs of filling, but also to sell them to customers separately. The quality of produced valves and caps satisfies the requirements of transnational customers;
Production of a tin can. On the territory of JSC "Arnest" there is a German enterprise for the production of tin cylinders with a capacity of up to 100 million pieces. in year. The quality of the products makes this manufacturer the only company in Russia whose products meet the demand of transnational customers for tin packaging for contract filling of aerosols;
Modern warehouse of UVP (hydrocarbon propellants) and equipment for purification of UVP. There is a production of 8 different pressures and mixtures for the entire range of products.
JSC "Arnest" has its own plant for the production of propellants, while none of the Russian manufacturers of aerosols and up to 90% of world manufacturers have these capabilities, but purchase ready-made mixtures. In addition, a serious competitive advantage is the UVP purification system, which allows you to purchase unpurified cheap isobutane fraction and have one of the main components of aerosols at least 40% cheaper than competitors;
Own warehouses for raw materials and finished products: the presence of a logistics warehouse for "L" Oreal, the presence of its own temporary storage warehouse (temporary storage warehouse) for customs clearance of imported goods.A warehouse terminal (11 thousand sq. m.) is at the stage of completion;
Own STC (scientific and technical center) - development of recipes, certification, state. registration. Own accredited chemical analysis laboratory;
Implemented MS Axapta ERP system;
A wide and developing distribution network, currently numbering more than 100 companies in Russia and abroad;
Strong management team focused on the final result.
Based on the above analysis of the competitive advantages of the Arnest company, it can be concluded that the company is successfully working in the production and sale of aerosol products, including due to the fact that it can withstand competition compared to similar objects in this market.
Conclusion
Summing up, it should be noted that in order to survive or win in tough competition, any organization must have certain advantages over its competitors.
Knowing the company's capabilities and sources of competitive influence will allow you to identify areas where the company can go into open confrontation with competitors, and where it can avoid it.
The more an organization has competitive advantages over current and potential competitors, the higher its competitiveness, survivability, efficiency, and prospects. To do this, it is necessary to improve the scientific level of management, to gain new competitive advantages.
The Arnest company is the Russian leader in the aerosol business in the field of high technologies, production volumes and product sales.
The company's strategy is to search best ways in order to offer consumers the highest quality products. The organization constantly increases the range of products offered and strives to develop the marketing component of the business.
Also, the priority goal of Arnest OJSC is to meet the requirements and expectations of consumers and other interested parties, to maintain the company's image on this basis and increase the competitiveness of products.
The study of the competitive advantages of the Arnest company shows the successful work of the enterprise for the production and sale of aerosol products, including due to the fact that the enterprise has certain advantages over its competitors in this market.
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Competitiveness is the ability of a business entity to get ahead of rivals using its advantages to achieve its goals.
Definition
This concept is one of the integral characteristics that can be used in evaluating the effectiveness of economic activities 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, one can find a variety of approaches to the definition of this concept:
From the standpoint of considering the features of the goals of the study and setting the task, which can lead one or another author to focus on a specific aspect of competitiveness;
As a result of the analysis of the features of the choice of the subject of research itself, which leads to the choice of the subject of competition (goods or services), subjects (enterprises, organizations, industries or national economy the state as a whole), etc.
Main types
There is competition at the level of:
Industries;
Region;
Enterprises;
products.
At the country level, competitiveness is the ability of the state to produce such goods and services that would meet the requirements of the world market, which would create conditions for increasing resources and ensure stable growth in the quality of life of people and GDP.
Competitiveness of the region - a similar formulation, but in this case all concepts are given at the level of the region, and instead of GDP, we are talking about the growth rate of GRP.
Considering the competitiveness of an organization, it should be noted that these are the possibilities of a business entity to achieve its goals in conditions of often fierce competition. In this case, we can also talk about meeting the needs of consumers in the production process and offering goods that have certain advantages over analogues on 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 make it possible to create products that are attractive to consumers.
And, finally, the competitiveness of a product is its ability for buyers to be attractive in comparison with other products due to its quality and cost characteristics, as well as consumer assessments.
Factors of competitiveness
To achieve some success in a modern market economy, the effective use of various factors that affect competitiveness, namely:
Communication policy of rival companies;
Development of new products and assignment of trade brands and marks;
Attractiveness and quality of packaging of goods;
Efficiency and organization of the service policy of competing firms;
Organization of sales of products from rivals and its main indicators;
Rationality of channels for the movement of goods from similar enterprises in the market.
In other words, the competitiveness factors reflect the indicators that are involved in the specific struggle of entrepreneurial structures to demand their own products, expand the circle of customers and increase their share in the modern market.
External factors
The factors influencing the efficiency of business activities of various business structures that can be used by competitiveness analysis include:
State factors expressed in economic methods (for example, depreciation and tax policies, financial and credit and investment policies, targeted programs and customs policy) and administrative and legal methods (certification, standardization according to the legislative framework);
market factors, defined by type and market capacity, competitors, labor resources, labor market, income level and industry characteristics;
Socio-political factors in the form public organizations, political stability, the level of culture and social status.
Internal factors
The ongoing competitiveness assessment can use the following internal factors:
The organizational structure of the enterprise (for example, financial, economic and production and technological potential, as well as logistics);
Innovative factor expressed in personnel potential, control and analysis of innovations, system of certificates and standards;
Quality of service and operation in the form of packaging, storage, transportation of products, environmental friendliness of products, recycling possibilities, etc.
Problematic issues
Competitiveness is associated with many controversial issues. This is, firstly, determining the degree of adequacy of the entire production and technical structure to the requirements in the field of marketing, assessing the possibility of effective resource saving in the production of high-quality and economical products.
Secondly, an increase in the level of competition between enterprises can affect the degree of awareness among employees of the organization's strategy and its goals.
Thirdly, increasing the competitiveness of the regulatory framework depends on regulations, technological and methodological documentation, as well as various qualities of finished products.
Fourthly, rivalry in the field of information resources can be expressed in a certain practical applicability, consistency and power of attorney.
Increasing the competitiveness of the enterprise
The success of any entrepreneur also depends on such an important factor as the internal environment, which is directly dependent both on the entrepreneur himself and on his competence, determination, willpower, skills and abilities in the process of doing business. In this case, it is impossible not to mention that the increase in the competitiveness of an enterprise is influenced by the strict observance by the entrepreneurs themselves and their managers of the regulations that are responsible for regulating the activities of a particular business, or the organizational and legal form.
Competitive advantages
These indicators can manifest themselves in the organizational, economic and technical and technological spheres of the entrepreneur's activity in the form of profit, high profitability and growth in sales. The assessment 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 the basic condition that determines the nature of the source of their manifestation. According to this feature, the following types of such advantages are known:
Economic orientation (market conditions, government policy, market factors that have a stimulating effect on demand, as well as the degree of allocation of financial resources of the enterprise);
Legal and 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;
The administrative nature, manifested in the restrictions on the part of the municipal and state power when issuing licenses and patents, quotas, etc.;
Technical character in the form of technical and technological features of production.
"Competitive advantage is gained by a company that performs strategically important activities at a lower cost or more efficiently than competitors" - Michael Porter
The terms “competition” and “competitiveness” are closely related to the concept of “competitive advantage”.
Competition is the most important element of the mechanism associated in market conditions with the formation of an economic proportion based on the rivalry of commercial entities for better and more economically favorable conditions for the investment of capital, the sale of goods and services.
The most important characteristic of any market is the current level of competition. Operating in the market, the company usually faces competition from other firms that produce and sell similar products. Each of them, as a rule, strives to occupy a leading position and the largest possible market share. It is competition that forces commodity producers to constantly introduce the most efficient methods of production, update the product range, that is, form and maintain competitive advantages.
Enterprises compete to achieve a competitive advantage and gain a strong position in the market. Competition takes place in the marketing environment, in specific conditions of time and place.
One of the areas of competition is the formation of competitive advantages of the organization. Within the framework of this direction, the organization needs not only to adapt to the conditions of competition, but also to search for and implement competitive advantages.
The main requirement is that the difference from competitors should be real and expressive. As B. Karlof said: "... it is too easy to declare that you have competitive advantages without taking the trouble to believe whether these supposed advantages correspond to the needs of customers ... as a result, products with fictitious advantages appear." Therefore, the organization must have several competitive advantages that must be protected.
Remedies may include:
Monopoly
Access to sources of raw materials
Know-how.
In order to successfully counter a competitive threat, an enterprise must have a certain anti-competitive potential. The organization and its product must be competitive. Capital and trading capacity should be oriented both to normal conditions for the movement of goods, and to extreme ones, when organizations are confronted by competitors. The reality of a competitive threat is assessed on the basis of an analysis of the market situation, when existing competitors are identified or the probability of their occurrence is determined.
Thus, competitive advantages are inextricably linked with competition. They arise when and where competition is present and develops. The more pervasive the competition in the market becomes, the more significant competitive advantages are for the success of the organization.
The role of analysis and evaluation of the competitiveness and competitive advantages of organizations increases with the spread and intensification of competition between them.
Competitive advantages are often identified with the ability of an enterprise to more efficiently manage available resources. This analogy has good reasons, since the meaning of competitiveness is most often interpreted as the ability to outperform rivals in achieving the set economic goals. However, there are differences between these concepts.
Competitiveness is a consequence of the presence of competitive advantages in a competing entity, that is, competitiveness and competitive advantages have causal relationships.
Competitiveness is a result that captures the presence of competitive advantages in all indicators, which include profitability, management efficiency, business activity, liquidity and market stability. At the same time, the production, sale of competitive goods and the efficient use of all resources in a competitive environment remain the main attributes of a competitive organization. However, the presence of certain competitive advantages does not mean that consumers automatically prefer one or another hospitality enterprise.
The study of the reasons for the emergence of competitive advantages covers almost all levels of the organization's activities, since the awareness of the prospect is realized in real competitiveness.
The competitive advantages of each of the business entities have internal and external sides. The internal side is a set of achievements of a business entity, with which it intends to conquer the market and squeeze out competitors. The external side is an assessment of the degree of attractiveness of a given business entity for the external environment, taking into account its achievements.
An important circumstance in ensuring competitive advantages under the influence of the environment is the presence of a competitive strategy in a competing enterprise. It is designed to solve the problems of adapting an enterprise to the created conditions, transforming individual environmental conditions in order to obtain competitive advantages.
Thus, the competitiveness of organizations is a manifestation of the competitive advantage of their characteristics over similar characteristics of competitors, achieved by adapting to changing conditions of the competitive environment. Competitive advantages act simultaneously as the goals of competitive rivalry of business entities, and as tools for such rivalry. If a competitive advantage is easily reproduced by competitors, then it loses value. Therefore, the enterprise needs to develop strategies for their formation and preservation.
Competitive advantage is often equated with competitiveness. This identification has certain grounds, since competitiveness is most often interpreted as the ability to gain a strong position in the market by virtue of achieving the best ratio of price and quality of goods. However, there is an important difference between these concepts: competitive advantages are just a potential opportunity to succeed, while competitiveness is the result of their effective use. The acquisition of competitive advantages in itself does not automatically ensure high competitiveness. They need to be put into action, which is impossible without a scientific system of organization and management. Competitiveness is also significantly affected by the external environment for the functioning of economic entities, which is extremely dynamic and unpredictable. Thus, competitive advantages and competitiveness correlate with each other as content and form, while the form, as a rule, is richer than its content, since it is the result of the interaction of a complex set of both internal, essential factors and external ones.
Competitive advantage and competitiveness refer to a product, corporation, industry, economy. The competitiveness of a product reflects its ability to more fully meet the needs of buyers and in comparison with similar products, or substitute products. It is largely determined by competitive advantages in the form of the best ratio of product quality and price. In addition, the competitiveness of the goods is influenced by the advantages of the corporation in organizing warranty and post-warranty service, the effective competitiveness of the goods indicates the feasibility of its production and the possibility of a profitable sale.
At the same time, the competitiveness of a product is not only high quality, but also skillful maneuvering in the market space, and most importantly, maximum consideration of the requirements and capabilities of specific groups of buyers. Moreover, an objective assessment of all aspects of the level of competitiveness can be made only on the basis of criteria indicating a high demand for this product. Ultimately, the competitiveness of a product is a specific form of manifestation of competitive advantages in managing the process of its development, implementation and operation. Consequently, the competitiveness of a product is characterized by the following four integral indicators: the quality of goods, price, operating costs (application, use) of the product during its life cycle, and the level of after-sales service. The value of these indicators of the competitiveness of a product depends on the strength of the influence of external and internal factors that determine its competitive advantages.
The competitiveness of a product is directly and directly related to the competitiveness of a corporation, which is the result of the effective use of its competitive advantages in the organization of R&D, production, finance, marketing, labor and motivation. A higher level of organization of production, finance, labor, and the sales process compared to the average industry conditions allows the corporation to produce products at the best price-quality ratio and, therefore, occupy a dominant position in this market segment.
The competitiveness of a product and a corporation are objective indicators that are determined through intra-industry competition, the main result of which is the industry (market, social) price of the product. Those corporations whose economic costs are below the industry average are the most competitive and receive economic (excessive) profits.
Depending on the availability of certain competitive advantages and market conditions, each corporation develops its own competitive strategy. The most famous are the following five types of competitive strategies: leadership strategy based on low costs, strategy of the best price-quality ratio, strategy of concentration on a narrow market segment based on instant satisfaction of the demand of a certain group of buyers and price differentiation in accordance with the elasticity of demand.
Each of these strategies allows the corporation to significantly strengthen its market position and achieve high economic and financial results. At the same time, each of them has its own specifics, due to which its effective implementation is possible only with an appropriate level and quality of management.
At the same time, it is very important to have information about the strengths and weaknesses their competitors. Taking into account the existing competitive advantages, a corporation can occupy one of six possible competitive positions in the market: 1) dominant, when it controls the behavior of other competitors and has a large set of modern competitive strategies; 2) strong, when the corporation has strong long-term positions in the market that are not able to change any actions of competitors; 3) favorable, when there is a steady demand for the product and (or) service of the corporation; 4) reliable, in which the corporation is confident in expanding its activities through the release of new products; 5) weak, when the corporation has low financial results, but there is still a certain opportunity to improve its market position; 6) unviable, when the corporation is insolvent, any volume of output brings losses, and there are no opportunities to improve its situation.
One of the important tools for increasing the competitiveness of a corporation is to determine the strategy of competitors. The strategy of competitors and their likely actions in the near future have a direct impact on its own strategic decisions: either it is necessary to take a defensive position or use aggression. If a corporation does not pay attention to the actions of its competitors, it enters into blind competition, which greatly weakens its position in the market. The most general idea of the main competitors of the company is obtained on the basis of a thorough study of financial and economic information about their condition, position in the industry, strategic goals, methods of competition.
Ultimately, the competitive advantages of a corporation, like the competitive advantages of a product, are determined by a complex combination of external and internal factors.
An extremely important role in the mechanism of economic growth and the efficiency of the economy belongs to the competitiveness of the industry. The competitiveness of an industry is determined by the availability of technical, economic and organizational conditions for the creation, production and marketing (with costs no higher than international ones) of high quality products that meet the requirements of specific consumer groups. The competitiveness of an industry implies the existence of competitive advantages over similar industries abroad, which can be expressed in the presence of a rational industry structure; groups of highly competitive leading firms pulling other enterprises in the industry up to their level; a well-established research and development and progressive production and technological base, a developed industry infrastructure, a flexible system of scientific, technical, production, material and technical and commercial cooperation both within the industry and with other industries in the country and abroad, an effective system of product distribution. The competitiveness of the industry is achieved both due to the competitive advantages of its subjects and the system of their interaction.
Despite the fact that the severity and pattern of competition in each industry are different, nevertheless, there are common factors that determine their market position. Thus, Harvard Business School Professor M. Porter believes that the competitiveness of an industry is determined by the following five competitive forces: 1) rivalry between sellers within the industry for a buyer; 2) the threat of the emergence of substitute products; 3) the possibility of the emergence of new competitors within the industry; 4) the ability of suppliers of raw materials and components to dictate their terms; 5) market power of consumers. The same approach to the assessment of the main competitive factors is contained in the works of F. Kotler.
The competitive advantages of an industry are in many ways similar to the specific advantages of its corporation. Thus, the external competitive advantages of the industry include: a high level of competitiveness of the country, active state support for small and medium-sized businesses, high-quality legal regulation of the functioning of the country's economy, openness of society and markets, a high scientific level of management of the country's economy; compliance with the national system of standardization and certification international system, appropriate state support for science and innovation, high quality of information support for the management of the country, a high level of integration within the country and within the world community, reasonable tax rates, positive interest rates, availability of affordable and cheap resources, a high-quality system of training and retraining of managerial personnel in the country , good climatic conditions and geographical position of the country, a high level of competition in all areas of activity in the country.
The main internal competitive advantages of the industry are as follows: the presence of high consumer demand for the industry's goods, the optimal level of concentration, specialization and cooperation in the industry, the optimal level of unification and standardization of industry products, the high proportion of competitive personnel in the industry, high-quality information and regulatory and methodological base management in the industry, competitive suppliers, access to high-quality cheap raw materials and other resources, performance of work on optimizing the efficiency of resource use, a high level of radical innovations, competitive managers, functioning of a competitiveness system in organizations of the industry, certification of products and systems, exclusivity of the industry product , high efficiency of the organization of the industry, a high share of exports of science-intensive goods, a high proportion of competitive firms and products of the industry.
Due to the fact that the competitiveness of a corporation determines complex set external and internal factors, a necessary condition for the successful implementation of a competitive strategy is to identify key success factors in both the short and long term.
Key success factors (KSF) are those factors that the corporation and the industry should pay special attention to, since they determine their success in the market in this period. Key success factors vary across industries and corporations. In addition, they can change over time in the same industry under the influence of changes in both internal and external environment. Practice shows that it is very rare to single out more than three or four KFU at a certain point in time. As a rule, these are one or two factors that may relate to various structural links of the KFU economy, depending on technology (the quality of scientific research, the possibility of developing new products, the degree of mastery of existing technologies);
CFU related to manufacturing (low cost of production, good quality, high degree of utilization of production capacities, advantageous location of the enterprise, availability of skilled labor, high labor productivity, the ability to manufacture a large number of product models);
KFU related to the sale of products (a wide network of wholesale distributors and retail stores, low selling costs, fast delivery);
KFU related to marketing (highly qualified employees of the sales department, a technical assistance system available to the client, accurate execution of customer orders, art of sales, attractive design, packaging, guarantees);
KFU related to the professional skills and qualifications of the firm's employees.
Skillful identification and use of key competitive factors significantly increases the competitiveness of the corporation and the industry.
The competitiveness of a product, corporation, industry, ultimately determines the competitiveness of the national economy. The more competitive goods and services, firms and industries in a country, the higher the competitiveness of its economy.
Thus, all structure-forming types of competitiveness of the modern market economy are interconnected and interdependent. As an organic whole, they represent an objective assessment of the level of development and efficiency of the national economy, its place and role in the international division of labor.