Question

QUESTION 3 Provide examples of factors affecting international competitiveness." Thereafter, explain how "strategic management should take into consideration those factors,

Answer 1

Factors affecting international competitiveness:

Economies of scale- Having a larger scale of business aids in international competitiveness, if costs are lower compared to rivals, then it is easier to be competitive especially on a global platform. For example a company based in the UK manufactures bikes at a cost of 200 dollars a bike, another company manufactures the same bike in China for a cost of 100 dollars, this reduction in cost due to large scale production helps to retain competitiveness at the international level.

Supply chain infrastructure- If the supply chain of a business is operating effectively and aiding organizational efficiency, it helps the business retain it's competitive edge. For example, a company which is able to source it's raw materials quickly and has faster production will be in a better position to take advantage of fluctuating demand in international markets.

Brand value- If a brand is recognizable and has established goodwill with consumers in multiple markets then it is more likely to be competitive globally. Take Apple as an example, it is a company that has a strong brand value as people have a positive outlook on their products and services and therefore are more likely to become potential customers.

Organizational efficiency- A business which operates with maximum efficiency across all departmental activities is more likely to be competitive on the international level. For example having an efficient customer service team that provides timely and proper service results in greater customer retention rates.

Localisation and adaptation to various markets- Business that are adept at changing their product mix depending on the market are more likely to be competitive in foreign markets. If we look at McDonalds, it offers different products for the various market it competes in, the menu in India is different from their menu in the United States. Also using local suppliers enables businesses to cut costs and better compete with domestic players.

Strategic management looks at different factors and determines how they can be utilized to attain the organization's goals. If a business is not strong in a particular segment, say localisation, strategic management enables the business to focus it's resources into achieving maximum localisation in target markets in order to increase competitiveness. The organisation can also take advantage of it's strengths, if marketing is a forte, then it can put a greater emphasis on it's brand value and attract consumers in new markets. Revising strategic goals as needed, continuously setting new goals, and focusing on core competencies will result in maintaining global competitiveness.