THE EVALUATION OF THE COMPANY’S COMPETITIVENESS AND WAYS TO INCREASE IT
УДК 338.26
Федорович П.Е., студентка 3 курсу
ХНЕУ ім. С. Кузнеця
Анотація: в статті розглянуті рівні та фактори конкурентоспроможності в цілому, класифіковані основні типи методів оцінювання конкурентоспроможності підприємства та опрацьована сутність SWOT-аналізу і PEST-аналізу.
Ключові слова: оцінка конкурентоспроможності підприємства, фактори, рівні, методи.
Abstract: the article describes the levels and factors of competitiveness, classifies the main types of methods of company’s competitiveness evaluation and divulges the essence of SWOT-analysis and PEST-analysis.
Keywords: firm’s competitiveness evaluation, factors, levels, methods.
In the era of globalization and internationalization of production, the only criterion of its efficiency and demand for manufactured products is competitiveness. Competitiveness is a relative concept, since a product successfully competing in some markets can be uncompetitive in others. That is why, proper evaluation of the competitiveness enables a company to identify what are its advantages and disadvantages over its competitors and after it an enterprise can exactly determine how to reach continuous improvement of the production and how to increase the sales volume.
As an enterprise often faces the great amount of competitors, the problem of «competitiveness» is increasingly becoming the subject of research and analysis of many specialists and scientists, despite the rather significant quantity of such great people as M.E. Porter, B.V. Burkynskyy, I.I. Kretov, I.L. Dulisova, A.V. Kotlik, T.I. Lepeiko and etc.
In addition, competitiveness can be considered at several levels - product (as the competitiveness of a product), micro level, meso level, and macro level. Each of these categories has distinctive features and characteristics that confirm the validity and expediency of such differentiation. At the same time, all levels of competitiveness are interconnected. The characteristics of the competitiveness levels can be seen on the table 1 [1].
Table 1
Characteristics of the competitiveness levels
| Level | Object or subject | Factors |
|---|---|---|
| Goods | Goods (works, services) | Goods quality Price Demand conformity |
| Microlevel | Goods producer (organisation, firm) | Comparative production competitiveness Effectiveness of production activity Financial indicators of activity Effectiveness of organization and sale |
| Mesolevel | The union of enterprises, industry | Internal structure of industry Influence of external environment Competitiveness of separate elements |
| Macrolevel | Country, region | Investment climate Scientific and technological level Competitiveness of industry and national economy |
Obviously, there is even a necessity of the enterprise’s competitiveness evaluation as in the conditions of market economy the correct competitiveness assessment is an essential element of any business entity’s activity. Certainly, there are many methods applied for competitiveness estimation, which are classified according to some features and are provided on the table 2 [2].
Table 2
Classification of the methods for enterprise’s competitiveness assessment
| Classification group | Method |
|---|---|
| Matrix | BCG-matrix; SWOT-matrix; Ansoff’s matrix; Shell matrix; Porter’s competitive advantages matrix; PEST-matrix. |
| Index | Method based on identification of production competitiveness; Method based on the theory of effective competition; Method of integral assessment; Method of benchmarking. |
| Graphical | Polygon of competitiveness; Radar of competitiveness; Method of «profiles». |
To summarize, according to the table 2 there are lots of various ways of evaluation of company’s competitiveness enabling to assess the situation in the internal and external environment for the company. Among the most widespread and flexible strategic means of competitiveness assessment, there are SWOT-analysis and PEST-analysis.
To begin with, the essence of the SWOT-analysis is the analysis of internal and external factors influencing the company, risk assessment and evaluation of goods’ competitiveness of the goods in the particular industry (Fig.1) [3].
Fig. 1. SWOT-analysis matrix
Consequently, the strengths mean winning sides of the product or service provided by the enterprise, that cater a competitive advantage in the market or more prevailing position in comparison with competitors, while weaknesses are such internal characteristics of the company, which impede the growth of the business and prevent the product from leading the market. Furthermore, the company’s opportunities are favorable environmental factors that can affect business growth in the future, while threats are negative environmental factors that may weaken the company’s competitiveness in the market in the future and lead to lower sales and a loss of market share. Surely, business should minimize these threats in order to avoid extra expenses.
To mention PEST-analysis, it is a simple method for analyzing the macro environment of the enterprise. PEST analysis is considered to be a tool for a long-term strategic planning and is prepared for 3-5 years ahead, with annual corrections and renovations ( Fig. 2) [4].
![Fig. 2. PEST-analysis matrix [4]](content/img/1/17-2.png)
Fig. 2. PEST-analysis matrix [4]
As it is shown on the Fig. 2., political ones are the factors of the political and legal environment of the company. During analyzing them, it is recommended to answer questions regarding key changes in the field of political stability and legal regulation. Moreover, there are economic factors which represent the economic state of the market. Socio-cultural factors are responsible for society, i.e. for the demographic situation, for the level of education and qualification of the people, for the features of the mentality and preferences of population. Undoubtedly, technological aspect is closely connected with the development of science and technology, innovations, discoveries and patents, novelties in information technologies. Obviously, PEST-analysis provides many advantages. The management of the enterprise deeply integrates in external environment of a firm and due to that the company exactly identifies its targets [4].
In conclusion, certainly, competitiveness is a difficult and versatile economic concept, without studying which no enterprise could operate effectively and efficiently. Undoubtedly, it is wrong to think that strengthening and improving the competitiveness of a firm can be achieved simply by quick responding to changes in consumer demands or the intentions of major competitors. In modern conditions, changes in technology and production technologies, improvements in manufactured products or services do not occur under the pressure of the external environment (in the form of marketing requirements or when new engineering developments appear), but all the time (predicting, first of all, future needs and options of competitors in order to satisfy most customer needs). The working out and implementation of a particular strategy that can better meet the rapid changes in the external environment has become an extremely important part of the management of most companies. And one of the main roles in the strategic plans of successfully functioning enterprises is the taking into account and use of their own competitive advantages, as well as the ability to withstand the threats from competitors [5].
REFERENCES
Гельвановский М.И. Конкурентоспособность в микро-, мезо- и макро-уровневом измерениях / М.И. Гельвановский, В. Жековская, И. Трофимов. – М.:МПУ, 1998. – 75 с.
- Classification of the methods for company’s evaluation. <
Портер М. Конкуренция / М. Портер. – М. : Диалектика Альянс, 2010. – 592 с.
Науковий керівник
к.е.н., доц. Мазоренко О.В.