What is Competitiveness?
What is Competitiveness?
Competitiveness – and the conditions for it – forms a complex concept. Basically it’s about beating competitors in qualifying for an order and getting it with good conditions so the company ultimately makes a surplus. A simplified model of competitiveness covering the key variables can be conceptualized as visualized in the figure below:
Elaborated, the company or organization must deliver quality, dependability, speed and flexibility while also being cost effective. Such capabilities are developed based on strategies for example on innovation, continuous improvements, procedures, organization, location and human, physical and financial resources. These factors play different roles in different industries depending on company characteristics such as size and different capabilities as well as industry characteristics such as rivalry among competitors and supply structures. This whole competitiveness of the firm is then depending on external or context factors such as economic development, national characteristics, cultural values, societal institutions and infrastructure.
Some dimensions that can be relevant to observe and observe and analyze within the different parts of the model are:
Watch Christer Karlsson explain Competitiveness
Watch here (Redirect to Youtube)
- Denne video om konkurrenceevne er et af flere bidrag, som indgik i Industriens Fonds strategiproces.
- This video about competitiveness is one of several contributions which were included in the strategy process of Industriens Fond.
Competitive Role; not doing wrong, best practice, strategic factor, advantage
Objectives Priority; trade-off choices in quality, dependability, speed, flexibility and cost
Processes; workshop, batch, mass, flow
Resources; plant, equipment, staff
Organization; forms and managerial processes
Systems; capacity and process planning, quality control, maintenance
Improvement; rationalization, continuous improvement programs
Quality; capability of doing things right
Dependability; capability of doing things on time / when promised
Speed; capability of doing this fast, short cycle and lead times
Flexibility; capability of changing what is done - volumes, product mix or to new products or services
Cost; capability of producing goods and services at relatively low costs
Industry; structure, technologies, development
Suppliers; structure, bargaining, power
Customers; structure, bargaining, power
Rivalry; numbers, sizes, development
Size; actual volumes, relative size
Resources; physical, human, externally available
Technologies; areas, levels, closeness to front, externally available
Dynamic Capabilities; capabilities of developing and changing the above ones
Qualifiers; capability of being considered for tender
Order Winners; capabilities that make buyers choose or have preference for product or service
Orders; capabilities of reaching deals
Sales; volumes and development, market shares
Margins; volumes and development, relative to competitors and market characteristics
Growth; turnover, market share, internationalization, M&A, new products and services, organizational innovation
Economic Development; e.g. GNP growth over a period
Institutionalization; institutions in society
Infrastructure; physical, electronic
Labour Market; knowledge, flexibility
Financial Market; equity availability, loan possibilities
Other National Characteristics; market size