Competitiveness

It is one of a features that characterises an enterprise. The essential condition for competitiveness to take place is the presence of at least two establishments. Research of global competitiveness is impossible, due to the fact that there are no common points of reference to global economy. That is because competitiveness is a relative feature, that needs a special relation between an object (an employer, an establishment, domestic economy) together with another object. Making a research of competitiveness demands one level or the same category of objects to make necessary comparisons. Competitiveness has a crucial role in building an enterprise strategy. A company using its competitiveness analysis and some constrictive conditions (including market-driven and non-market-driven factors) in its development strategy has a chance for a successful entering the market. The situation in which an enterprise tries to form its competitiveness strategy leads to development of three different ranges of action: exclusivity, complementarity and substitution of the market offer. Competitiveness is an important part of all market analyses. It is also an ability of an enterprise to compete and to be resistant for others on the market.

Porter’s five forces

An American economist, M. E. Porter is one of the first to make a research in the field of competitiveness. He was trying to establish conditions in which an enterprise can be a successful competitor and how to empower its influence on the market. The economist sorted out five different market forces, regarding which one has to analyse its market situation when trying to determine its competitiveness. They are the following:

• competition among enterprises of the same market segment,
• force of suppliers and its impact on a company,
• power of stakeholders and its impact on a company,
• a threat of new entrants,
• a threat of substitutes.

Competitiveness — recommended articles

Mobility barriers — Competitive position — Competitive risk — Near environment — Threat of new entrants — Internationalization — Strategic planning tools — Life cycle of organization — Strategic driver

References

• Ireland, R. Duane, and Michael A. Hitt. Achieving and maintaining strategic competitiveness in the 21st century: The role of strategic leadership, The Academy of Management Executive 13, no. 1 (1999): 43-57.

Author: Klaudia Majka