Экономические науки/10. Экономика предприятия

Solod A.V., Ph.D. Sorokina L.I.

D.Serikbaev East Kazakhstan State Technical University

Assessment of competitiveness of a service providing enterprise by constructing a polygon of competitiveness

Assessment of competitiveness of an organization is important for every manager. Knowledge of company’s strengths and weaknesses gives it the opportunity to make strategic decisions in timely manner which will allow the firm not only to keep its competitive position but also to increase its competitiveness.

We can state that some progress has been made in the assessment of the competitiveness of products and services today. There has been developed quite acceptable methodology for evaluating the competitiveness of identical products and services. However, it is more difficult to assess the competitiveness of companies that provide services for citizens: the universally accepted methodology for assessing the competitiveness of those type of companies has not been developed yet.

Due to the fact that service industry is rapidly evolving and improving today, it became quite popular. It tends to result in a large number of enterprises operating in this field. With each passing day the competition among service providing enterprises increases and the management staff has to constantly develop criteria for improving competitiveness.

We can assess the competitiveness of service providing enterprises by constructing a polygon of competitiveness.

Facing a big market with many competitors a firm should identify its strengths and weaknesses, and to secure a level of competence in several directions simultaneously, which can be graphically represented as a vectors of polygon of competitiveness. In our research the vectors describe the following parameters:

1 price of service;

2 type of service in the enterprise;

3 frequency of service;

4 discounts that are offered by the enterprise;

5 reputation of the enterprise.

The choice of parameters is based on the analysis of a wide set of problems of technical, economic and social nature with the result that identifies the variables that ensure competitiveness. The starting point of this analysis is to identify a list of technical and economic factors of competitiveness, which are treated as a set of criteria for quantitative assessment the level of competitiveness of the service providing enterprise.

For estimating the parameters a special scale used where 0 point is the worst and 100 points is the best (table 1).

Table 1. Assessment of competitiveness’s parameters of the enterprises

Parameters of competitiveness	Assessment of parameters of the objects of comparison, points
	Enterprise А	Enterprise B	Enterprise C
1 price of services	75	25	10
2 type of services	100	75	100
3 frequency of services	75	100	100
4 discounts	100	50	100
5 reputation of the enterprise	75	75	100

Assessment of competitiveness should be interpreted as a geometric figure which is a quantitative measure of the stability of the competitive condition of the enterprise.

The level of competence of each enterprise-competitor is assessed by vectors. Each vector in its limit value is the radius of the circle corresponding to the maximum potential of the internal capacity of an economic entity (ideal variant).

Each direction is indicated on the scale of vector with the corresponding point (evaluation), and then all the points are connected by one common. Overlaying the polygons of the enterprises-competitors on each other, it becomes possible to identify strengths and weaknesses of an enterprise in relation to another (figure 1).

Figure 1. Polygon of competitiveness of the enterprises

Enterprises A, B, and C are located in the East Kazakhstan region (The Republic of Kazakhstan) and engaged in the provision of recreational and entertainment services to the population of Ust-Kamenogorsk. In our research the enterprise A is a direct object. Figure 1 shows that the enterprise A is the leader in the price of services. Values for «type of services» and «discounts» of object of research in line with similar values with enterprise C, but at the same time, the parameter «reputation of the enterprise» from the object of research has a small lag. The parameter «frequency of services» of the enterprise A has a lag from both competitors. As a result of the analysis of estimation of parameters of competitiveness by constructing a polygon of competitiveness can be concluded that the company A is competitive enough, but there are reserves for improvement of competitiveness.

The method of constructing a polygon of competitiveness has its advantages and disadvantages.

The advantage of the method is the visual representation of the analysis of competitiveness in all directions of the research. The analysis of the estimates shows the strengths and weaknesses of the competitive battle in all directions of competitiveness. Then we can develop actions to secure the strengths and liquidate the weaknesses.

The disadvantage of the method is that the reflection of a large number of indicators requires to increase the size of the scale. If the scale is too small, the marks and lines will worsen the visual perception of the image. Another disadvantage of the method is the lack of predictive information about how one or another company-competitor can improve its performance.

In conclusion, the method of constructing a polygon of competitiveness can be successfully used to estimate the competitiveness of service providing enterprises and, despite the lack of predictive values, can demonstrate the strengths and weaknesses of the enterprise.

Work cited:

1. Lifits I.M. Theory and Practice of assessment of competitiveness goods and services. - Moscow: Yurait-M, 2005.