International Competitiveness Management

In modern conditions, to achieve a strong competitive position in the international market, it is necessary not only to possess certain key competencies in narrow areas of specialization, but also to professionally understand the composition, significance, and degree of interrelation of factors determining the achievement of desired targets. Regarding international competitiveness, it is necessary, along with internal operational efficiency factors, to consider the specifics of the external environment, including the specifics of socio-economic relations, the legal and political environment, and the industry structure, as well as to be able to use modern methods for their analysis and forecasting. The application of a set of modern approaches to competitiveness management makes it possible to consider these factors, justify management decisions and take a dominant position in the international market.

The concept of competitiveness has a long history, while there is currently no agreed position on the definition of this concept. Most experts consider competitiveness as a generalizing indicator of effectiveness in relation to the participant (subject) of socio-economic relations in question. For example, in relation to small-scale nuclear power facilities, considerable attention is paid to achieving the efficiency of layout solutions, parameters of operating modes, the choice of materials used, and many other areas. It is logical that the generalizing indicator should consider all the efficiencies and characterize the success of this product line in the markets.

Competitiveness is an integral characteristic of a participant in competitive relations, reflecting his ability to achieve advantages in the field under consideration (market). Its quantitative indicator is determined from two sides: 1) as the ratio of market positions with the analyzed competitor, and 2) as the ratio of generalized quality indicators and the costs of achieving them. This approach makes it possible to find the required indicators characterizing the development of the analyzed subject of market relations in the development of management decisions.

By now, a wide range of scientific methods has been developed aimed at analyzing competitiveness factors, the diversity of which is reflected in their classification. Many sources identify product, matrix, operational and combined methods, capitalization methods and systematic approaches to competitiveness assessment.

Within the framework of product methods, the factors characterizing the product offered on the market from the point of view of consumers are considered. This area is comprehensively investigated by the theory of marketing. The most common methods in this field include the justification of the structure of factors based on strategies of price leadership, differentiation, concentration, diversification, cooperation, internationalization, segmentation, positioning, GAP-analysis, 4P, 5P and 7P Marketing Mix models and many others.

Matrix methods, in developing the capabilities of product methods, expand the apparatus for analyzing the dynamics of the external environment and its impact on the resulting CS indicators. At the same time, the objects under study continue to be considered in the context of a set of activities (product portfolio). An example of matrix methods is the Boston Consulting Group matrix, which reflects the position of product lines in terms of relative market share and growth rates.

Operational methods are based on factors that explain the underlying causes of competitive advantages. The theory of competitiveness, devoted to operational methods, is based on the history of its formation, measured by several centuries. A great contribution to the development of scientific positions in this field was made by T. Man, A. Moncretien, A. Smith, D. Ricardo, A. Cournot, D. Miles, later K. Marx, W. Jevons, F. Edgeworth, A. Marshall, D. Case, J. Schumpeter, R. Solow, M. Porter and many others, Fig. 2 Most of the research at the stages of the formation of the CS theory was devoted to the analysis of factors influencing the CS of states. A. Smith became the founder of the classical concept of competitive relations, suggesting that land, capital, natural resources, and labor should be considered as fundamental factors determining the advantages of states in international trade. The theory of comparative competitive advantages developed by D. Ricardo was one of the first attempts to explain the mechanism of national competition, the competitiveness of firms and the economy.

After two hundred years of dominance of the competitiveness provisions based on the theory of comparative advantages, M. Porter proposed to additionally consider factors that are "not inherited but created." M. Porter put forward the idea of interacting factors, which formed the basis of the "competitive diamond" methodology, in which factors of production, demand, and the state of binding factors were attributed to the main groups of competitiveness factors. and supporting industries, strategies, structures, and rivals.

The target orientation of the combined methods includes an assessment not only of the current level of competitiveness, but also of its development potential. In most cases, the current competitiveness is determined based on an assessment of the competitive advantages of product lines of activity (product methods), and the potential one is based on an assessment of specific performance indicators of individual operations (operational methods). The mathematical apparatus also combines algorithms of product and operational methods.

Competitiveness assessments based on capitalization indicators assume that the market valuation of the object under study combines key indicators of its external and internal environment and is the ultimate criterion for financial well-being and economic efficiency. Sales volume, profit, cost, and other financial indicators are accepted as intermediate characteristics of certain economic aspects of a participant's competitive relationship.

System methods, based on their definition, are designed to fill in the shortcomings of the individual competitiveness assessment methods listed above. We also must consider that today, despite the wide range of modern methods of analysis and forecasting, there is a lack of practice-oriented quantitative models that combine the depth of consideration of the internal structure with applied usefulness and visibility. The MCC-model can serve as one of the examples of systematic methods for assessing and forecasting competitiveness, ensuring a rational balance of quantitative detail with visual interpretability of justifications, and resulting indicators for management decision makers.

Within the framework of the methodology used, subjects of socio-economic relations are analyzed in conditions of competitive interaction on a set of equilibrium states determined by the ratio of indicators of market positions (MP) and competitiveness estimates, considering the integral influence of the factors considered in the model (integrated competitiveness assessment).

The competitiveness factors are analyzed in the context of three circuits reflecting their consistent detail:

• Circuit 1 reflects the object under study from the point of view of the product competitiveness and defines the structure of the factors characterizing the products (goods/services) the considered field of activity on the part of consumers;
• Circuit 2 reflects the object under study from the point of view of the operational CS and defines the structure of the factors that form the necessary conditions for the creation of the products (goods/services) in question;
• Circuit 3 reflects the composition of the key competencies (KC) of the subject under study, which are a subset of the factors of the second circuit, ensure the achievement of advantages in a competitive environment and are justified in terms of the optimal ratio of achieved indicators and expended resources.

Based on the basic principles of competitiveness theory, which allow using product and operational methods to evaluate competitiveness, integrated competitiveness estimates, determined by the influence of factors of the first and second circuits, will coincide with the value of the ratio of market positions (MP) of the subjects under consideration, up to the deviations resulting from transients in the systems under consideration during external shocks or changes in their states of equilibrium. In other words, the first and second circuits of the MCC-model are essentially a system of equations connecting a vector of variables common to the two circuits, characterizing market conditions, and variables characterizing factors affecting the MP separately for each circuit. At the same time, the MP is considered as an assessment of the competitiveness. Given the practice of using econometric models in business, these systems of equations are often approximated by regression models.

The competitiveness assessment for the first two circuits is built separately for each product area, the structure of the factors of the third circuit is justified considering the existing complete product portfolio of the analyzed company, which allows using the present methodological framework to develop strategic development plans based on a balanced structure of key competencies.

The approaches to competitiveness management developed by the department are widely used in the public and corporate spheres, in which many students and young specialists begin and develop their careers. The staff of the department will be happy to share theoretical knowledge, accumulated practical experience and help students of the disciplines and participants of our project work in building a professional track.