THEORETICAL ACPECTS OF COMPETITIVNESS

УДК 339.137.2

Савельєв Д.С., студент 4 курсу
ХНЕУ ім. С. Кузнеця

Анотація: Конкурентоспроможність є однією з ключових концепцій, яка активно використовується в теорії та практиці економічного аналізу і є багатовимірною. У статті проаналізовано поняття “конкурентоспроможність” з систематичних і методологічних позицій і уявлень про її сутність; визначені деякі ключові аспекти концепції конкурентоспроможності.

Ключові слова: конкуренція, конкурентоспроможність, конкурентоспроможність країни.

Abstract: Competitiveness is one of the key concepts that is actively used in the theory and practice of economic analysis and is multidimensional. The article analyzes the concept of “competitiveness” from systematic and methodological positions and representations about its essence; defines some key aspects of the competitiveness concept.

Key words: competition, competitiveness, competitiveness of nation.

The term of “competitiveness” is one of the most commonly used concepts in economics but it is not precise enough, what means that there is no generally accepted definition of competitiveness. The term originated from the Classical Latin word “petere” meaning to seek, attack, aim at, desire, and the Latin prefix “con-” meaning together. At present, it is often used in different contexts, meaning dissimilar things to different researchers. The phrase was coined in the 70s of the twentieth century. It was then that American economists, under the evidence of serious trade battle between American and Japanese companies, undertook the first attempts to determine the degree of competitiveness between the rival economies. In line with other research sources, the oil crisis and the associated loss of comparative advantage by some industries in the developed countries triggered attention in this economic category [1].

Despite all the amount of literature and researches on this topic, the meaning of the term remains vague and to make things even more complicated, the exact meaning depends on the problem under hand (tab. 1).

The competitiveness of products or services means the ability to withstand competition, that is, the possibility of successful sale in a particular market at a certain point in time. To do this, the product must meet the specific ability of the consumer and be affordable.

Table 1

Definitions of competitiveness according to various authors

Author Definition
Michael Eugene Porter [2] Competitiveness is an ability of an economy to provide its residents with a rising standard of living and a high employment on a sustainable basis
Paul Krugman [3] If competitiveness has any meaning, it is simply just another way to express productivity. The ability of a country to improve its living standard depends almost entirely on its ability to raise its productivity. Competitiveness is meaningless word when applied to national economies
World Economic Forum [4] Competitiveness is the set of institutions, policies, and factors that determine the level of productivity of a country
Rais Akhmetovich Fatkhutdinov [5] Competitiveness is the property of an object, which characterizes the degree of real or potential satisfaction of specific needs in comparison with similar objects existing in the market
Yudanov А.Y. [6] Competitiveness is the degree of attractiveness of a particular product for the consumer who makes his real purchase
Groshev V.P. [6] Competitiveness is a complex of consumer properties of a product, which determines its distinction from other similar goods in terms of the degree and level of satisfaction of customers’ needs and the costs of its acquisition and operation

Competitiveness is a complex characteristic that determines the preference of a product on the market compared to similar competing products, both in terms of the degree of compliance with a particular public need and in the cost of meeting it. At the same time, among goods of a similar purpose, the one that, due to its properties, brings the greatest effect in relation to the price of consumption possesses greater competitiveness in the market [7].

Competitiveness has been described by various authors as a theoretical, multidimensional and relative concept associated with the market mechanism. In here-presented analysis of its definitions, the concept may refer to different levels of aggregation: national, regional, local, industrial, sectorial, as well as to individual companies. Representative of classical theory A. Smith considered competition fair, without conspiracy, rivalry, which is conducted between sellers (or buyers) for the most favorable terms of sale (purchase) of goods. A. Smith first proved that competition, equalizing the rates of profit, leads to an optimal division of labor and capital. For him, the capital investments and trade ensures the specialization and result in raising the productivity and the output. With respect to trade, Adam Smith demonstrated that the benefits of trade appear when the autarchic regime changes into free trade, and the nations involved have an absolute advantage in the production of some goods. So, trade means differences of productivity [8].

Almost infinite variety of real world situations and array of possible problems have created a continuum of views to answer the question what is competition that “more than two hundred years after Adam Smith we still don’t know” and Krugman [3]. to claim that at least in the case of nations (international trade) the term competitiveness is meaningless. The World Economic Forum, which has been measuring competitiveness among countries since 1979, defines it as “the set of institutions, policies and factors that determine the level of productivity of a country” [4]. The concepts of such authors as Rais Fatkhutdinov and Andrew Yudanov which describe competitiveness as the degree of satisfaction or attractiveness are more suitable for description of the degree of competitiveness.

Porter [9] connected competition with the ability to freely enter or exit the market. Thus, according to him, profitable markets yield high returns and they will attract new entities. Unless the entry of new entities can be blocked by incumbents, the abnormal profit rate will trend towards zero (perfect competition). Porter develops the concept of competitive advantage by defining that the basis of competitive advantage is specialization [1].

The conducted research of scientific sources allows us to conclude that competition, as a scientific concept is multidimensional and in each case, its content is determined depending on the purposes in connection with which it is formed. Despite the confusions surrounding the definition of the competitiveness concept, the economic literature shows some of the important aspects:

  • there is no theoretical perspective complex enough to define the term;
  • competitiveness means qualitative and quantitative factors and conditions;
  • competitiveness has several dimensions: national, regional and local;
  • competitiveness is explained by composite factors.

REFERENCES

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  2. Porter M.E. The Competitive Advantage of Nations / M.E. Porter. – New York: The Free Press, 1990. – 875 p.

  3. Krugman P. Making Sense of the Competitiveness Debate / P. Krugman // Oxford Review of Economic Policy. – 1996. – 12(3). – P. 17–25.

  4. What is competitiveness? // World economic forum.

  5. Фатхутдинов Р.А. Управление конкурентоспособностью организации. Учебник / Р.А. Фатхутдинов. – 2-е изд. – М.: Изд-во ЭКСМО, 2005. – 544 с.

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  7. Экономика предприятия: Учеб. пособие / В.П. Волков, А.И. Ильин, В.И. Станкевич и др.; Под общ. ред. А.И. Ильина, В.П. Волкова. – М.: Новое знание, 2003. – 677 с.

  8. Hategan D.B. Anca. Litterature review of the evolution of competitiveness concept / D.B. Anca Hategan // Annals of Faculty of Economics, University of Oradea, Faculty of Economics. – 2012. – July. – Vol. 1(1). – P. 41–46.

  9. Porter M.E. On Competition / M.E. Porter. – Boston: Harvard Business School Press, 1998. – 485 p.

Науковий керівник

к.е.н., доц., Котлик А.В.