Constanta Maritime University's Annals Year XIII, Vol.17 291 ...

Constanta Maritime University’s Annals Year XIII, Vol.17
ABSTRACT
COMPETITIVENESS FACTORS
POPA LILIANA-VIORICA
Constanta Maritime University, Romania
Porter's theory supports the idea that, despite the globalization of production and trade, the competitive advantage is
created in a national framework, nations, through their institutional, natural, cultural, economic characteristics
ultimately determining the development of certain economic activities. The factors considered by Porter as determinants
for the competitive advantage are grouped in four categories, the linkages between them being important as well.
Keywords: Competitiveness, microeconomic, macroeconomic.
1. INTRODUCTION
Competitiveness is in the most general sense a
complex phenomenon related to the capacity of a
country compared to others, to form and to ensure an
economic, social, political way, to support the rapid
creation of added value.
2. CASE-STUDY
Therefore we present a range of definitions
available for the notion of competitiveness:
- Uri (1971): "the ability to create preconditions for
high income".
- Orlowski (1982): "the ability to sell".
- Scott and Lodge (1985): "the ability of countries to
produce, distribute and sell goods and services in the
global economy, and doing so gains to increase the
standard of living".
- Porter (1990): "the only indicator that completely
defines the concept of competitiveness at the national
level is national productivity";
- OECD / TEP (1992): "to produce goods and
services able to cope with international competition
while maintaining and amplifying real domestic
income";
- Management Forum (1994): "Competitiveness
world country or company is able to generate
proportionally more wealth than its competitors on the
international market".
The notion of competitiveness has uses in various
ways, on multiple levels. When referring to the
development of a country heading into the world
economy, the concept of competitiveness allows
comparison performances, but also growth potential in
the future.
Studies on competitiveness of nations began in the
40s. The most representative work is the theory of the
commercial trade flows which is rooted in the classical
Ricardian theory of comparative advantage. The theory
of comparative advantage argues that the factor
endowment of a nation determines its competitivity, the
theory was exceeded due to the economic realities that
have denied it. This does not explain a present situation:
there are many resource-rich countries, but with poor
economy around. Today raw materials, capital and even
labor force are mobile, a phenomenon called
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globalization, that inheritance factors are not sufficient to
determine the increased competitiveness of a nation.
Main drivers of national competitiveness are:
I. national economic factors:
• Local resources (endowment with natural resources,
labor, existing infrastructure, technology and
financial resources, etc.)
• Size and structure of domestic demand;
• The art and industry efficiency and sub-suppliers
parts;
• Industrial structure and competition.
These four national economic factors create an
economic environment, a national context in which firms
are born, compete and gain competitive advantage using
it internationally. In the local resources are taken into
consideration human resources, physical resources,
scientific and technological resources, financial
resources and national infrastructure. National
competitive advantage is that companies can use the
necessary combination of factors at low cost or whether
the factors used are of a higher quality level.
The companies gain competitive advantage if
domestic demand creates enough pressure to influence
innovation accelerated. Also high standard of domestic
customers can contribute to competitive advantage and it
obliges companies to use high standards in quality,
facilities, services and more.
The presence of efficient sub-suppliers and subbranches
of industry related to potential other sectors is
very important in gaining competitive advantage. The
last component of national economic factors relate to the
existing industrial structure. Oligopolistic competition
type structures facilitate the conquest of new markets for
the following reasons:
• National rivalries create pressure for innovation that
enhances competitive advantage;
• Oligopolistic structure creates competitive
advantages for all industries with competitive prices,
quality, reliability in long term relationships;
• This structure creates a competitive environment
that is difficult to recreate by competition with
foreign rivals.
II. Action by government is crucial to creating
competitive advantage outside the company. The role of
government is to influence and enhance the national
economic factors mentioned above. This influence can
be direct subsidies, industrial policy and other domestic

Constanta Maritime University’s Annals Year XIII, Vol.17
demand indirectly by shaping the standards and
regulations. A crucial role of the government market is
the fact that is a major buyer of goods and technologies
such as telecommunications equipment, weaponry,
computers, vehicles etc..
III. Mondo-economic factors are constituted of
three main elements:
• Deregulation of the U.S. had four important
consequences:
• eradication of strong inflation (inflation down below
4%);
• loss of state control over interest rates and exchange
rate term by strengthening financial markets;
• directing the market economy at the expense of
government;
• Consolidation involves globalization economies to
cope with increased competition.
• Collapse of communist systems of economic
management - a phenomenon with many economic
and political implications.
-Internet explosion - as soon the whole world will
be "a global network" and everyone can receive and
deliver messages for any purpose including buying or
selling.
Globalization of markets has led globalization
marketing. Global marketing refers to encouraging
research initiatives to find new market segments or
niches around the globe, harnessing the opportunity of
buying and selling products and services internationally.
Globalization of markets has triggered a
phenomenon that at first sight seems paradoxical to say
individualization consumer needs. Gradually the
company's trade policy is going from national markets to
absorption of the transnational consumer segmentation
with identical behaviour in several countries. Productmarket
couple move from a national even international
European dimension.
The production is not standardized, but flexible and
the company is no longer considered an isolated entity, it
maintains itself with suppliers, distributors a set of
relationships which give a high degree of flexibility in
operation.
IV. Other factors affecting competitiveness are:
• Structure favouring foreign investment and domestic
demand helps to modernize the economy. The most
widespread foreign investment may have adverse
effects located mainly in the industrial specialization
(in many areas indigenous firms are unable to
defend their market positions in the foreign
companies).
• Demands ever higher that environmental protection
requires.
• Evolution phenomena and processes in the global
economy.
According to Michael Porter, the main factor of
profitability of firms is given by the industrial sector for
economic attractiveness. In any industry, there are five
forces that determine the profitability and structure: the
entry of new competitors, the existence of substitutes,
bargaining power of buyers, bargaining power of
producers and economic rivalry. The importance of the
five forces varies from one industry to another
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depending on economic and technical characteristics
change over time (M. Porter, 1980).
Michael Porter distinguishes three types of
strategies that can be applied by companies to create
competitive advantage: cost leadership through
differentiation and focus. Appropriate strategy allows the
company to capitalize on strengths and to protect the
adverse effects of the five forces. Each of the three
strategies involves choosing different ways to ensure
competitive advantage.
Porter defines four stages of competitive development at
national level:
• The development stage due to factors of production;
• Develop specific investment stage;
• The development stage due to innovation;
• Stage of development determined by wealth.
3. RESULTS AND DISCUSSION
The transition from one stage to another involves a
metamorphosis in the industrial infrastructure, financial
system, technological standards and attitudes. A great
importance id also constituted by cultural values behind
the forces creating and distributing wealth. To explain
the success of similar systems adopted by different
countries is necessary deep understanding of cultural
ethics and social values of these nations.
The first three stages of economic development,
national competitiveness is increasing, and in the fourth
economy may decline. Following the four stages of
developing the competitiveness of a nation defined by
Porter, Romania could be between the first and second
stage, and between that determined by factors that
determine production and investment. The
competitiveness notion has various uses in multiple
ways. The term is used in national competitiveness, but
sequentially, for narrow areas such as international trade,
commodity market and others.
4. CONCLUSIONS
To obtain an advantageous position on the reference
market, the companies are determined to discover the
factors of competitiveness that will put in such a position
and will enable competitive advantage. Moreover, a
trader with a marketing vision focuses its strategy
towards the market in order to create a product or a
service more competitive, that the consumer needs and is
adapted to the exigencies.
The most important factors that may contribute
decisively to the competitiveness of an organization, are
considered next:
- price of the product / service. If a product or service
satisfies a consumer need, be it especially if price is
lower than that of competitors. As a result, price
competition becomes a factor eliminator.
- quality product / service. If the product or service to
consumers the same price is better quality than the
competitors, then be preferred by consumers, quality
becomes a factor eliminator.
- value for money. This factor captures the best way to
purchase a product or service to most consumers, while
highlighting the competitiveness of enterprises. If at a

Constanta Maritime University’s Annals Year XIII, Vol.17
certain quality of a product or service required a higher
price than the prevailing market respect, the value for
money becomes a factor eliminator for the entity in
question, because it fails to obtain profit than by
increasing the price of a product (service) the same
quality to that provided by its direct competitors. Or the
selling price is the same with that of competitors, but
quality product (service) is lower.
Using these three factors determining
competitiveness quantitative always a balancing market
as a price reduction or quality improvement of products /
services will determine the reaction the other
competitors, so that consumers will be permanently put
in the position to choose the product or service with the
best quality / price ratio.
- cost of the product / service. To be efficient and
competitive businesses are looking to produce a lower
cost as consumer products or services.
- profit. The difference between price and cost of
production becomes the profit gained through work
performed by the entity. Profit, the competitive factor is
both a function and objective pursued by it.
- the cost / profit. Even if profit maximization is the goal
of any trader, this does not allow obtaining competitive
if profit is made with high costs. In the long run, the
operator be removed from the market by a competitor
who registers the same income but with a cost / profit
efficiency. There are situations, especially for small
businesses, when a company can ACTi a small market
and a profit based on production costs very low. in time,
the lack of possibility to allocate a portion of profit for
development, investment, etc., is precisely its lack of
competitiveness will lead to removal from the market.
- volume of sales made. This factor determines the size
of the economic competitiveness in the market
concerned, especially when they can be calculated and a
series of indicators of capacity market (market share,
relative market share). As the market share held by a
company be greater, the more we can say that it occupies
much of the market, so it holds a competitive position.
- economies of scale. The quality factor contributes
significantly to the competitiveness of an economic
agent. As it achieve a higher yield lower cost experience
curve occur that cause economies of scale.
- technology used. May become an important asset of an
undertaking which uses modern production capacity, has
a high capacity to integrate Cloudy and technological
progress in a particular field.
- time. As the decisive factor to obtain competitive
advantage time is the speed of providing a product /
service, but also the reaction speed of competitors in
certain situations. To these we can add the speed "with
which consumers can choose the product / service,
providing a great source of variety information sources.
- management. It is a decisive competitive factor
especially when used by managers who fail to harmonize
their objectives with available resources and market
demands. In other words the entire management system
should be market oriented, so that now manage to hold a
competitive position. But this can not be achieved
without applying the next competitive edge:
- marketing. Regarded as a function of enterprise
marketing is one of the most significant competitive
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factors existing at present. As consumers are turning to
these products / services that best meet their needs, they
will choose those who have significant advantages. As
stated Philip Kotler.
Most prosperous companies are those that manage
to offer their customers the expected satisfaction,
understanding marketing cape not a separate function but
as the learned philosophy of the entire organization.
What is needed is to identify marketing compartment
categories of consumers and the needs that a company
can meet in a profitable way, and the ways in which this
can be achieved with high efficiency in comparison with
other competitors.
The first stages of economic development, national
competitiveness is increasing, and in the fourth economy
may decline. Following the four stages of developing the
competitiveness of a nation defined by Porter, Romania
could be between the first and second stage, and between
that determined by factors that determine production and
investment. The competitiveness notion has various uses
in multiple ways. The term is used in national
competitiveness, but sequentially, for narrow areas such
as international trade, commodity market and others.
If we consider equality between prosperity and
competitiveness, then rightly marketing vision, so
necessary a company acting in a competitive market,
requires that it be market oriented, taking into account
customers, and competitors.
It is possible that in the future to shape a new factor
of competitiveness, management, marketing, because it
embodies the best all processes, relationships and
practical actions necessary to carry out an effective
activities designed to ensure a position in a competitive
field. Understood and used effectively, marketing
management can be turned into an advantage major
competitiveness of enterprises (organizations) modern
market oriented.
The level that is generated is the microeconomic
competitiveness. A country becomes competitive when
you manage to build that environment that allows each
company to become effective added value, to be able to
survive or develop in any domestic economic
environment, especially internationally.
The level that supports and reinforces
competitiveness is macroeconomic. Country maintains
or improves their profitability internationally when
deciding to apply the set of economic policies to
stimulate the achieving optimal micro-level required
expansion.
5. REFERENCES
[1] CIUPEGEA, C. A summary of the concept of
competitiveness, the National Institute of Economic
Research Annals, Romanian Academy, INCE, CIDE,
Bucharest, 2001;
[2] IANCU, A., Advantage theories, industrial and
development of European integration, Economica, no. 3-
4/2000, SOREC, IRLI, Bucharest, 2000;
[3] HORNIANSCHI, N., Selective restructuring of
industrial production - macro and micro component of
the strategy, PhD Thesis, National Institute of Economic
Research, Bucharest, 1998.

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[4] AXELROD, R., The evolution of cooperation,
Ed.Basic Books, 2004.
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[5] PORTER, M., FULLER, M., Coalitions and global
strategy in Porter M.E. (ed), Competition in global
industry, Harvard University Press, 2006.