ÓÄÊ: 658.14/17

Kruglov V.N.

Institute of management, business and technology

 

Effective leadership economic development

 

Keywords: competitiveness, characteristics, entity, products, demand, product, market segment, leadership, trademark, restructuring.

Abstract: the article deals with the existing and most promising forms and methods of formation of competitive advantages of firms in market segments. Given a comprehensive definition of this concept different schools, both domestic and foreign. The author analyzes the most preferable in terms of cost-effectiveness vectors of further development. Conducted multivariate algorithm research. Based made of the thesis provides practical recommendations.

 

Competitiveness is one of the most important characteristics, which are used to evaluate the effectiveness of economic activity of economic entities. The word competitiveness, with respect to any entity, means a potential and/or actual ability of the subject to compete.

Competitiveness the competitiveness of the enterprise-the manufacturer of the products relate to each other as part and whole. The company's ability to compete in the commodity market the industry is directly dependent on the competitiveness of the goods and the aggregate economic methods of activity of the enterprise [1].

Often, the concept of "competitiveness" reduce to the definition of "the ability of the organization to produce competitive product." Thus, under the firm's competitiveness means the ability to effectively use their strengths and to focus its efforts in areas of production of goods or services, where it can take a leading position on the domestic and foreign markets.

Competitive advantages can be called a "product" of the system of market opportunities for the company. After all, how can companies exist without a demand for its products (services), so there is no market opportunities without competitive advantages. Competitive advantage can make the company recognizable in the market, protect from the effects of competitive forces. Competitiveness is the result of fixing the competitive advantages, without which it is impossible.

Competitive advantage is a system that has any exclusive value, giving it superiority over competitors in the economic, technical and organizational fields, and the ability to make the most effective use of resources [2].

Sustainable competitive advantage is the long term benefit from the implementation of a unique strategy focused on value creation, which at the same time, neither existing nor potential competitors [3].

One of the main tasks of the enterprise is the desire to be better than the particular competitors, on a company in one market and have intersecting goals. Therefore, any results should be compared with the results of competitors.

During the formation of competitive advantages of the possible options:

§ concentration on the competitors, which is based on a comparison of the company with its closest competitors;

§ orientation on customers and meeting their needs, when, in making decisions, managers rely on the opinions of customers about how the company looks in comparison with competing firms;

§ on market orientation perspective, when equal attention is paid both to consumers and competitors.

Any factor was not only competitive, but a decisive advantage, it must be of key importance in meeting the needs and, at the same time that it was based on the uniqueness of the company's business. However, the value it has as a base the quality and the uniqueness of the product [4].

The factors that determine company's competitive advantage as a complex, multi-functional, open, hierarchical socio-economic system are many and varied on the sources and nature of its manifestation. Classification of them quite complex, but necessary for the firm. Most often there are following five groups of factors of competitive advantage: cultural, technological, global, and innovative resource. The composition factors of competitive advantages can be supplemented with organizational and structural factors on which the attention of Th. Schumpeter.  

Unlike the commodity's competitiveness the competitiveness of the organization cannot be achieved in a very short period of time. It is achieved with long and distinguished service firms in the market. Hence we may infer that the firm employed over a long period of time on the market, has a large competitive advantage over the company, only incoming to the market or running a small period of time. In other words, a company's competitiveness is determined by its competitive advantages.

Formation of competitive advantages of an enterprise occur due to the choice of the right business strategy, the basis of which, these are the most advantages [5, p. 305].

Any competitive advantage gives higher efficiency than the competition. Firms with low costs at equal with competitors prices on comparable products have the opportunity to make big profits. Thus, firms with diverse products profit per unit of output will be higher as the differentiation allows the firm to set high prices that under equal costs with competitors gives more profit.

Competitive advantage of the enterprise can be high competence, which is evident in the superiority over competitors in the economic, technical, technological, organizational fields. Often two groups of factors that ensure the organization's competitive advantage is the superiority in resources (best quality, low price, etc.) and the best craftsmanship, skill, ability (everything to do with efficiency and quality performance of all types of work: research, design, planning, etc.). Important competitive advantages that have been achieved through the improvement of the second group of factors, as they require a complex and systematic work organization and significant intellectual effort, but, importantly, they are difficult to copy.

Competitive advantages must find the real embodiment in the product, price, service quality, lower costs and other indicators of the company and to be perceived by the consumer, i.e. should be measured and evaluated economic indicators: higher profitability, greater market share, a large volume of sales, etc. Not used in competition benefits are not benefits per se, because it is not embodied in new products, has not led to the improvement of the company.

The composition of benefits depends on the industry. For example, for high-tech companies competitive advantage will be identified mainly with technical superiority, product and process innovation, for companies dealing with massive demand, is, in the first place, brand recognition, small costs and geographical location.

Competitive advantage must be:

§ visible, i.e. discernible customers;

§ sustainable, i.e. to retain its relevance in terms of changes in the environment, non-renewable competitors;

§ profitable for the company, i.e. production volumes, costs and market prices provided to allow the product to operate successfully in the chosen field and to obtain a sufficient profit.

As another indicator, company's competitive advantages can be:

1. Possible simulation: simulated and unique.

2. Time: short and long term.

The competitive advantages of each has its specific resource, so the company's position in the market based on the volume of competitive advantage, relevance (availability to competitors) and the length of the life cycle of a competitive advantage. The more unique, difficult-to-reproduce competitive advantages and the length of their life cycle, monumentalnie strategic position of the company.

The modern theory of competitive advantages, pay great attention not only the competition itself, but also the cooperation of companies from competition. It is the development of this direction in the future seems to be the most promising and popular.

 

Literature:

1.              External environment and its impact on the organization // Center for Creative Technologies [Electronic resource]. – http://www.inventech.ru/lib/management/management-0011/

2.             Comprehensive economic analysis of economic activity // Training center [Electronic resource]. – Access mode: http://www.classs.ru/library/node/2405

3.             The competitiveness of the enterprise // the Center for creative technologies [Electronic resource]. – http://www.inventech.ru/lib/predpr/predpr0041/

4.             Methods of economic analysis // the Center of financial management [Electronic resource]. – http://center-yf.ru/data/economy/Metody-ekonomicheskogo-analiza.php

5.             Kruglov V. N., Nuts S. A. Peculiarities of regional innovation policy in the model building for sustainable development of territories. /V. N. Kruglov, S. A. Nuts// Economics, statistics and Informatics. Vestnik UMO. – 2014. – ¹ 6(2) – p. 304-308.