Economy

THE MAIN PROBLEMS AND AREAS OF IMPROVING THE COMPETITIVENESS OF FOOD INDUSTRY

S. A. Gorbaschenko

National University of Food Technologies

Food industry is one of the leading and most important agriculture sectors in Ukraine. Its development is determined primarily by the position of the agricultural economy in the state as a whole, as well as political and social component.

New economic conditions of industrial enterprises have aggravated the competition both in the domestic and foreign markets. The consequences of the financial and economic crisis, the inconsistent government policies along the domestic producer’s protection, and a high level of moral and physical deterioration of assets caused the relevance of the industrial enterprises competitiveness problem. The problem of competitiveness is especially acute for the enterprises in the food industry.

 Due to the high demands on the quality of the industry, the poor management, the low activity and innovation effectiveness, the inadequate of the business processes and other reasons, many food companies were not prepared for the adequately active behavior in the market. This is mainly owing to the lack of the deep comprehension of the current issues and a clear understanding of the competitiveness background, i.e. conditions that can ensure the sustainable competitive position for food enterprise in the market.

The main factors of ensuring the food industry competitiveness are:
-the stable quality of products;

- the high level of production;

- the fast delivery of products;

- the reliable delivery of products;

- low price sales;

- the flexible changes of the design decisions;

- the flexible changes in the output;

- the service.

Of particular note is the assessment of the individual entities competitiveness in terms of their ability to survive in the face of fierce competition in the unstable market.

The approaches to assess the competitiveness of the food industry in modern conditions must be corrected taking into account the changes in the external environment, such as:

1) the competitive developments in the certain food segments;
2) the changes in the structure of the enterprises competitiveness - in the foreground are the factors such as financial stability and the goods competitiveness;
3) a high degree of uncertainty in the market and no predictability for further developments.

The assessment of the enterprise competitiveness can be done by the effective competition, which involves the following steps:

1. Defining the scope of competing companies.

2. Gathering the information about the competing companies’ activities.
3. Formation the system of the performance indicators.

According to the chosen method, the competitiveness is examined along the following areas:

- the effectiveness of the industrial process control is estimated by the parameters of the costs per unit of the output, by the capital productivity, the production profitability and the labor productivity;

- the efficient management of the working capital is estimated by the coefficients for the autonomy, the solvency, the absolute liquidity and the rate of the working capital turnover;

- the efficiency of sales management is estimated by the return on sales, by the ratio of the available finished product, by the coefficient of the production capacity utilization and the coefficient of the efficient advertising and sales promotion performance;

- the product competitiveness is based on comparing the price and the quality of the enterprise goods with the goods-analogues.

4. Formation of the scoring system and determination of the coefficients weight for each group of criteria. This is due to the fact that the certain parameters have different importance degrees for the calculation of the enterprise competitiveness coefficient. (CCE).

5. Calculation the coefficient of the enterprise competitiveness.
The main directions of improving the food industry competitiveness in the current environment are the following ones:

- the acceleration of the working capital turnover;

- improving of the financial stability and the financial enterprises independence through the optimization of own and borrowed funds in the capital structure;

- improving the marketing policy effectiveness by improving the marketing policy and the effective use of the competitive product advantages;
- the renewal of assets, most of which have a very high degree of deterioration;
- the new products introduction in accordance with the changes of consumers’ tastes and preferences.