Managing competitiveness in XXI century: effective business instruments

Abstract

The article is dedicated to the issues of managing competitiveness in the modern age of globalization, technology and innovation. The purpose of the paper is to analyze the influence of factors of competitiveness and offer effective tools for companies to create competitive advantages. The working classification of com­petitiveness factors includes external and internal factors. The external business environment covers industry-specific environment – competitors, customers, suppliers, as well as non-sectoral, economic, social, political, technological and other factors. The most effective tools for business responses to the dynamics of environmental factors or its forced changes in the present are different forms of inter-firm co-operation and mergers and acquisitions strategy. Both external growth tools are widely used in business and provide a number of benefits that are required for tightening up and market leadership. However, the leading role in ensuring the competitiveness of the business at the present stage plays the internal environment of the company, its resources and business processes. The quality and uniqueness of the internal environment of the company is provideв by the strategic leadership – a leadership style, aimed at knowledge, innovation and technology creation that are not available to competitors. Research methods include theoretical analysis, interviewing experts, analysis of best practices. The results can be used by management companies in various economic sectors in the development, adoption and implementation of strategic decisions. Author's contribution consists in providing the most effective management tools of busi­ness competitiveness at present.

Keywords

Business, competitiveness, external environment, internal environment, coop­eration, merger and acquisition, strategic leadership.

Introduction

Securing national business com­petitive power – is the problem which both business representatives and gov­ernment authorities are in search of the solution to. First and foremost companies tend to consolidate their positions and se­cure competitive edges of their products and their concrete enterprise. However in case of potential or real threat to their completive ability concerns the interests of the whole branch, the companies often pass to industry-wide level and work out corporate actions in order to consolidate the positions of the whole economy sec­tor. Speaking of a national competitive ability a state, first and foremost, means competitive ability of national economy in whole, understanding that for that end there is a need for competitive branches, enterprises and products. With this end in view authorities will offer various meth­ods of business support, change laws and regulations, solve infrastructural and en­vironmental matters etc.

Yet, so far there are no universal formulations regardless of the level these competitive ability problems are solved on. In each specific situation the result can be both positive or negative as the environment where such business com­petitive advantages are formed is very complex, multifarious and dynamic.

The present study intends to ex­amine the idea and factors of business competitive ability, so that from this point on offers a range of tools which will be the most effective in competitive abilities control on the level of compa­nies in the near decade.

Idea and factors of competitive ability

The term "competitive ability" during the last 20 years became rather actual because a great number of new states entered the circle of the world economy so economical competition among countries has strengthened. Rev­elation of national markets, lowering of trade barriers, globalization and interna­tionalization processes as a whole led to that sort of aggravation of competition, so in actual fact none of a company in the world can be sure in its tomorrow. There are always new threads on the horizon in the form of pioneer substitute products, bankruptcy of suppliers, changes in tax regulations, rates of exchange, countries entering WTO, world crisis etc.

The actuality and complexity of the problem can be confirmed by the fact that the questions of competitive ability are considered by economists of different specializations and are set out in various economic disciplines. Thus, competitive goods is mainly marketing field of re­search, which educe essential consumer qualities and terms of goods proposal in the market with a view to ensuring great demand for it. A competitive company – is the problem of strategic management which allocates the targets of business profitability and its benefits, which are necessary for long-term market pres­ence. The competitive branch and na­tional economy are studied by special­ists in the field of world economy as here the competition is of international aspect and the function of government regula­tion in some cases is of fundamental im­portance.

On account of the fact that the idea is multilevel there is no single, rec­ognized definition of the term "competi­tive ability. Therefore prior to relying on one oа the multiple definitions we need to define which level is the key and backbone one. Without controversy that is the level of a company. It is just a company and, to be more precise, its actions an decisions realized by its man­agers and employees make products, compete with other national and foreign companies, together with other compa­nies of the country form a branch and contribute in national GDP. The leading researchers in this field consider market share and profitability as the basic crite­ria. The positive dynamics of these rates in the longer term mean that the prod­uct of a company finds a market, i.e. it is competitive, that the branch wherein the firm is functioning is consolidating on domestic or foreign markets, that it contributes to national economy by way of work positions, taxes, levies and other payments.

However, while distinctly un­derstanding the main objectives of their business and criteria of competitive abil­ity, all too often companies do not know where to find growth sources and do not investigate which factors bring an ap­preciable effect and which should not be considered at all. Aside from that when colliding with changes managers often respond to accomplished events just us­ing intuition or the most evident short-run decisions. Yet it would be more ef­fective to foresee the events which can influence their business, and to develop reaction strategies through acting pro­actively. In such a manner business may not wait for any changes but to create, but to provoke them pro domo sua.

The most complete system of sources of competitive advantage of a company was suggested by an English scientist in the field of strategic manage­ment R. Grant. One of the approaches he proposed lies in separation of inner and external sources. For example the exter­nal sources include shift in consumers' tastes, onset of new goods and services on the market, departures of foreign eco­nomic policy of the state, changes of free market prices etc. Yet to the end that the external change frames the calmative ad­vantage, it must render differentiated ef­fect on companies owing to their various resources and responsibilities or strate­gic positioning. The peculiarities of the internal environment of a company, its resources and business processes define the character and rate of response to ex­ternal changes, that's why the quality of internal environment also leads to en­hancement or loss of competitive abil­ity.